AT&T Is Said to Mull Share Offering of Latin American TV Assets

(Bloomberg) -- AT&T Inc. is working with advisers on a possible public offering of its Latin American pay-television assets, according to people familiar with the matter, potentially getting funds to reduce debt from its planned takeover of Time Warner Inc.

The largest U.S. pay-TV company hasn’t made a final decision about what to do with the businesses, said the people, who asked not to be identified because the deliberations are private. AT&T hasn’t held talks with potential buyers to sell the operations, the people said.

The public market could value the business at $8 billion to $10 billion, depending on which assets are included, one person said. AT&T would use the proceeds to help pay down debt after its $85.4 billion takeover of Time Warner. That deal is set to close by the end of the year, the company has said. AT&T’s total debt will increase to least $180 billion once the Time Warner acquisition is completed.

An AT&T spokesman declined to comment.

Ever since AT&T acquired DirecTV for $48.5 billion in 2015, the U.S. phone and TV giant has been ambivalent about the Latin American assets that came with the deal. Those businesses include satellite-TV services in the Caribbean and in South American countries from Colombia to Argentina, plus a 93 percent stake in Sky Brasil and 41 percent of Sky Mexico. 

AT&T executives have at times talked about using the various TV operations in Latin America as a way to extend the reach of some of its future Time Warner programming. But at the same time some of the governments and economies of countries like Venezuela and Brazil have presented challenges.

AT&T’s main focus has been on preparing to integrate Time Warner’s media business, automating its own vast landline network and developing a new 5G wireless network, all while continuing to expand mobile service in Mexico. Since the Latin American TV assets aren’t integral, AT&T could find it attractive to sell the business or take it public to shore up its balance sheet.

To contact the reporters on this story: Alex Sherman in New York at asherman6@bloomberg.net, Scott Moritz in New York at smoritz6@bloomberg.net, Alex Barinka in New York at abarinka2@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum