AT&T: Asset sale proceeds to help fund cash portion of $67 billion DirecTV purchase

By Lisa Kerner

Charlotte, N.C., May 19 - AT&T Inc. will use about $14 billion of cash to fund its $67 billion purchase of DirecTV, Inc.

About half of that cash will come from the sale of AT&T's noncore assets, including its interest in America Movil and the sale of its New England properties to Frontier Communications Corp., said chief financial officer John Stephens on Monday during a conference call to discuss the agreement details.

AT&T agreed to acquire DirecTV in a stock-and-cash transaction valued at a total of $67 billion, including $19 billion of DirecTV debt.

According to AT&T, it also intends to finance the cash portion of the transaction through a combination of cash on hand, committed financing facilities and opportunistic debt market transactions.

"Incremental net debt to AT&T is expected to be about $26 billion - that includes the remaining cash consideration for this transaction and assumed DirecTV debt," Stephens said.

Transaction details

DirecTV shareholders will receive $95 per share, comprised of $28.50 per share in cash and $66.50 per share in AT&T stock, subject to a collar.

The transaction is slated to close within 12 months upon regulatory and other approvals.

AT&T is a Dallas-based telecommunication services company. DirecTV is a digital entertainment company based in El Segundo, Calif.

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