AT&T to Sell Puerto Rico Business--Update
By Shalini Ramachandran and Drew FitzGerald
AT&T Inc. has agreed to sell its Puerto Rican and U.S.
Virgin Islands businesses to Liberty Latin America Ltd. for $1.95
billion in cash, a move that could allow the telecommunications
giant to shave its debt load, according to a person familiar with
The companies plan to announce the deal as soon as Wednesday
morning, this person said.
AT&T's operation in Puerto Rico provides cellular, landline
and internet connections. The company was initially seeking a
valuation of closer to $3 billion for the Puerto Rican assets, this
Liberty is already the biggest pay-TV and broadband provider on
the island. Cable tycoon John Malone, who holds a 25.5% voting
stake in Liberty Latin America, and Liberty Latin America CEO Balan
Nair have told investors they would like to expand in the region
through disciplined mergers and acquisitions.
Liberty plans to finance the cash deal in large part by raising
debt against the combined Puerto Rican operation, the person
Puerto Rico accounts for a small sliver of AT&T's domestic
operations, but shedding the unit will help it work down a large
debt load accumulated through its $80 billion-plus acquisition of
Time Warner last year. The company's net debt stood above $160
billion earlier this year, though executives have said they would
end the year with less. AT&T's market value recently stood at
about $270 billion.
A deal would signal progress on AT&T's goal of selling
noncore assets, something activist investor Elliott Management
Corp., which recently disclosed a stake in the company, is also
pushing. AT&T has also sold its stake in streaming service
The complexity of the Puerto Rican unit slowed negotiations.
Thousands of residents of the commonwealth spend several months out
of the year on the U.S. mainland, for example, which complicated
the job of counting subscribers, according to another person
familiar with the matter. The island also was heavily damaged in
2017 by Hurricane Maria.
Liberty Latin America is a publicly traded telecom and cable
provider that operates in Chile, Puerto Rico, the Caribbean and
other countries in Latin America. The company spun out last year
from Liberty Global, the international cable operator headed by Mr.
Malone. The Latin American operator currently has a market value of
about $3 billion.
Write to Shalini Ramachandran at firstname.lastname@example.org
and Drew FitzGerald at email@example.com
(END) Dow Jones Newswires
October 09, 2019 08:55 ET (12:55 GMT)
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