AT&T to Sell Puerto Rico Business--Update

Data : 09/10/2019 @ 15:10
Fonte : Dow Jones News
Titolo : AT&T (T)
Quotazione : 39.16  -0.01 (-0.03%) @ 17:01
Quotazione AT&T Grafico

AT&T to Sell Puerto Rico Business--Update

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By Shalini Ramachandran and Drew FitzGerald 

AT&T Inc. has agreed to sell its Puerto Rican and U.S. Virgin Islands businesses to Liberty Latin America Ltd. for $1.95 billion in cash, a move that could allow the telecommunications giant to shave its debt load, according to a person familiar with the matter.

The companies plan to announce the deal as soon as Wednesday morning, this person said.

AT&T's operation in Puerto Rico provides cellular, landline and internet connections. The company was initially seeking a valuation of closer to $3 billion for the Puerto Rican assets, this person said.

Liberty is already the biggest pay-TV and broadband provider on the island. Cable tycoon John Malone, who holds a 25.5% voting stake in Liberty Latin America, and Liberty Latin America CEO Balan Nair have told investors they would like to expand in the region through disciplined mergers and acquisitions.

Liberty plans to finance the cash deal in large part by raising debt against the combined Puerto Rican operation, the person said.

Puerto Rico accounts for a small sliver of AT&T's domestic operations, but shedding the unit will help it work down a large debt load accumulated through its $80 billion-plus acquisition of Time Warner last year. The company's net debt stood above $160 billion earlier this year, though executives have said they would end the year with less. AT&T's market value recently stood at about $270 billion.

A deal would signal progress on AT&T's goal of selling noncore assets, something activist investor Elliott Management Corp., which recently disclosed a stake in the company, is also pushing. AT&T has also sold its stake in streaming service Hulu.

The complexity of the Puerto Rican unit slowed negotiations. Thousands of residents of the commonwealth spend several months out of the year on the U.S. mainland, for example, which complicated the job of counting subscribers, according to another person familiar with the matter. The island also was heavily damaged in 2017 by Hurricane Maria.

Liberty Latin America is a publicly traded telecom and cable provider that operates in Chile, Puerto Rico, the Caribbean and other countries in Latin America. The company spun out last year from Liberty Global, the international cable operator headed by Mr. Malone. The Latin American operator currently has a market value of about $3 billion.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com

 

(END) Dow Jones Newswires

October 09, 2019 08:55 ET (12:55 GMT)

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