Wall Street signals skepticism that AT&T can secure the government approvals needed to carry out its planned $85.4 billion acquisition of Time Warner. Jeanne Yurman reports.
AT&T is aiming to acquire Time Warner for more than $85 billion but investors are skeptical that it can get the government approvals it needs. Shares of both companies fell on Monday, with Time Warner trading well below AT&T's more than $107 per share cash and stock offer. AT&T's chief executive, Randall Stephenson, says a vertical merger, like the one between AT&T and Time Warner, has more chances of being approved. Though, at this point, investors need time to understand the size and scope of it says Amir Rozwadowski, U.S. telecom services analyst at Barclays. (SOUNDBITE) AMIR ROZWADOWSKI, MANAGING DIRECTOR AND SENIOR ANALYST FOR U.S. TELECOM SERVICES, BARCLAYS CAPITAL, (English) SAYING: "The challenge, of course, is that we're in a different political environment, and a different regulatory environment, and so, with this deal being announced, on the eve of an election, and, you know, what type of people will be put in place post that election really will factor into some of the decisions being made about the approval of this transaction." AT&T may be able to bypass U.S. Federal Communications Commission by offloading a Time Warner broadcast station in Atlanta, the only Time Warner asset that is FCC-regulated. But the deal will also need an approval from the Department of Justice. And a U.S. Senate antitrust committee plans to hold a hearing on the new deal in November.