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AT&T eyes Yellow Pages sale to Cerberus: Bloomberg
March 8, 2012 / 4:05 PM / 6 years ago

AT&T eyes Yellow Pages sale to Cerberus: Bloomberg

(Reuters) - AT&T Inc (T.N) is in talks to sell a stake in its Yellow Pages business to private equity firm Cerberus Capital Management LP in a deal that would value the entire telephone directory business at $1.5 billion, according to a Bloomberg report.

The phone company is being advised by Citigroup Inc and Bank of America Corp and has had talks with several buyout firms, according to the story, which cited unnamed people familiar with the matter.

AT&T, Citigroup and Bank of America declined comment. A representative for Cerberus were not immediately available to comment.

AT&T took a 48-cent-per-share charge in the fourth quarter reflecting the declining value of its Yellow Pages division after the business had been declining for years. Telephone directories have been rendered increasingly obsolete as consumers instead go to the Internet to find local business phone numbers.

Chief Executive Randall Stephenson said in January that business was one area he was “going to obviously take a very hard look at.”

He told analysts on a conference call that “it’s one of these areas that we’re going to have to decide, do we keep it or do we restructure it as we move forward?”

The price tag implies a valuation multiple of about 1.5 times 2011 earnings before interest, tax, depreciation and amortization (EBITDA) and 2 times 2012 EBITDA estimates, according Bernstein analyst Craig Moffett.

In comparison, AT&T’s rival Verizon Communications (VZ.N) sold its directory business in 2006 for about 8 times trailing EBITDA in a spin off.

“The window has already closed for selling Yellow Pages businesses at a meaningful price,” said Moffett.

Reporting By Sinead Carew; Editing by Derek Caney

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