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AT&T said seeking Time Warner deal by Monday

Alex Sherman and Ed Hammond

AT&T Inc. is pushing to clinch a deal to buy Time Warner Inc. by Monday, aiming to close the door on other potential bidders, according to a person familiar with the matter.

Talks between the companies have accelerated since Bloomberg first reported Thursday that executives had met in recent weeks to discuss potential business combinations, said the person, who asked not to be identified discussing private discussions. Part of AT&T’s concern is that other suitors such as Alphabet Inc.’s Google or Apple Inc. could jump in, the person said.

Shares of Time Warner, the owner of CNN, HBO and the Warner Bros. studio, surged in trading Friday, advancing as much as 14 percent to $94.44. That gives the company a market value in excess of $70 billion and pushes the stock beyond the $85-a-share Rupert Murdoch’s 21st Century Fox Inc. unsuccessfully offered in 2014. AT&T, the largest U.S. pay TV company through its ownership of DirecTV, fell as much as 4.4 percent.

Apple is unlikely to bid for Time Warner, according to a person with knowledge of the matter. Apple’s services and content chief Eddy Cue brought up the idea of a possible deal with Time Warner’s corporate strategy head Olaf Olafsson late last year and said in a podium discussion on Thursday that he was a huge fan of the company’s Home Box Office.

Google didn’t immediately respond to a request for comment. AT&T and Time Warner declined to comment.

A deal for Time Warner would have to begin at a “bare minimum” of $100 a share, Alan Gould, an analyst at Brean Capital, said in a note Friday. His private market value for the company is $123.

“We have always believed that the combination of content and distribution makes sense,” Gould said in the note. Time Warner “has been the greatest content factory for films and TV.Given the rapidly evolving distribution universe, we believe content ownership could be beneficial.”

Time Warner Chief Executive Officer Jeff Bewkes is a willing seller if he gets an offer he thinks is fair, said one of the people. AT&T has transformed itself over the past decade from a regional phone company to a national telecommunications powerhouse. Its plan to focus on media and entertainment targets include companies worth $2 billion to $50 billion, people familiar with the plans said earlier this month.

If talks progress to a deal, the combination would make Dallas-based AT&T a media colossus as well. But investors would be asked to swallow another heap of debt, and probably a diluted equity stake, just a year after the company borrowed to acquire DirecTV for $48.5 billion. AT&T, with the third-lowest investment-grade rating, could make a deal work without getting downgraded to junk — but it would be tough.

The company has $120 billion in debt, while New York-based Time Warner had long-term obligations of more than $24 billion.

AT&T’s long-dated bonds dropped after the news. Its $2.5 billion of 4.55 percent coupon notes due in 2049 sank 4.03 cents to 96.64 cents at 11:34 a.m in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. Its $3.5 billion of 4.75 percent securities due in 2046 declined 4.73 cents to 99.93 cents at 12:28 p.m.

The cost to protect against losses on Time Warner bonds dropped 1.64 basis points to 64.36 basis points at 12:22 p.m. in New York, according to prices from data provider CMA.

With assistance from Scott Moritz Claire Boston and Alex Webb

To contact the reporters on this story: Alex Sherman in New York at, Ed Hammond in New York at