(Adds details on Lazard telecoms banking, boutique banks' rise
By Soyoung Kim and Nadia Damouni
NEW YORK May 14 AT&T Inc is working with
investment bank Lazard Ltd as it negotiates a potential
takeover of DirecTV, the country's top satellite TV
operator, according to people familiar with the matter.
AT&T is in active discussions to buy DirecTV for low to
mid-$90s per share, or nearly $50 billion, and is working to
finalize a deal in the next few weeks, Reuters reported on
Lazard, which advised Leap Wireless International on its
$1.2 billion sale to AT&T last year, is advising the wireless
giant this time around, the people said, asking not to be named
because the matter is not public.
The company has yet to bring in large balance sheet banks
for deal financing, according to the people, indicating that any
deal may take a few more weeks to materialize.
Representatives for AT&T declined to comment while Lazard
did not respond to requests for comment.
Reuters and others previously reported that DirecTV is
working with advisers including Goldman Sachs Group to
weigh a potential deal with AT&T.
The proposed deal, if it happens, would be a big payday for
Wall Street banks that are enjoying a revival in mergers and
acquisitions after several years of lackluster activity
following the financial crisis.
Based on a roughly $48 billion deal, advisers for AT&T could
earn between $40 million and $60 million in advisory fees, while
DirecTV's advisers could earn $50 million to $75 million,
according to preliminary estimates by consulting firm Freeman &
Co LLC. Those figures do not include any financing fees.
Banks pursue big-ticket deals not only for revenue but also
for prestige. Lazard's advisory role with AT&T also underscores
a growing trend of smaller investment banks, or boutiques,
winning larger deals often at the expense of mega banks.
In February, boutique advisory Allen & Co scored the prized
role of advising Facebook Inc on its $19 billion
acquisition of smartphone-messaging app WhatsApp. Paul Taubman,
a former top Morgan Stanley banker who is now acting on his own,
was lead adviser to Comcast Corp on its $45 billion
deal for Time Warner Cable Inc this year.
Lazard's global telecommunications banking team is led by
veteran banker George "Woody" Young, who joined the bank in 2009
from Merrill Lynch where he served as global head of technology,
media and telecommunications.
During his career, Young has advised on major transactions
for the world's largest telecommunications companies, including
three mega deals involving AT&T - Cingular on its $41 billion
merger with AT&T Wireless, SBC on its $22 billion merger with
AT&T, AT&T on its $89 billion merger with BellSouth.
Considered one of Wall Street's most experienced telecom
bankers, he also served as an adviser on other headline deals
that reshaped the industry, including working with Sprint Corp
on its $46.5 billion merger with Nextel that created
Sprint Nextel Corp.
(Reporting by Soyoung Kim in New York; Editing by Lisa