AT&T and Activist Elliott Management Said to Be in Talks

AT&T and Elliott Management have opened a dialogue, according to sources quoted by the Wall Street Journal.

Activist hedge fund Elliott Management has sought from AT&T extensive management changes, a reduction in costs, divestment of certain businesses, and a freeze on further acquisitions. The hedge fund is run by billionaire Paul Singer.

According to the letter Elliott Management wrote to AT&T in September, the suggested changes could lift AT&T’s sluggish share price by at least 60% by 2021.

AT&T and Elliott Management are talking

According to the sources, AT&T and Elliott Management have held discussions, and there is an ongoing dialogue. Moreover, the two parties may likely agree as early as this month, the Wall Street Journal said. However, there is still a risk that talks could break down.

In the world of corporate activism, Elliott Management commands a lot of clout. It has $38 billion in assets under management and an investment of $3.2 billion in a stake in AT&T. Even for Elliott Management, AT&T is one of the largest targets there is. The conglomerate commands a market cap of $ 270 billion.

Signs of truce?

One hint that talks might be heading somewhere came after AT&T last week put off its earnings release to October 28. Analysts interpreted the move to the possibility of the two sides needing more time to resolve issues.

According to a follow-up article in the Wall Street Journal, AT&T might well have a strategy to agree to some of Elliott’s issues to focus on larger priorities.

These include the rollout of the company’s much anticipated HBO Max streaming service, and the expansion of its 5G network.

[Related Story:  AT&T Considering Options for DirecTV Unit ]

 

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November 20, 2019

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