Acquisition DIRECTV by AT&T, Inc. May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of DIRECTV (NASDAQ: DTV) by AT&T, Inc. (NYSE: T). On May 18, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which DIRECTV shareholders will receive $28.50 in cash and $66.50 in shares of AT&T stock for each share of common stock, for a total consideration of $95.00.
Is the Proposed Acquisition Best for DIRECTV and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at DIRECTV is undertaking a fair process to obtain maximum value and adequately compensate DIRECTV shareholders.
As an initial matter, the $95.00 merger consideration is significantly below the target price set by at least four analysts, including a target price of $100.00 set by analysts at Macquarie Group and Atlantic Equities LLP. Further, on May 6, 2014, DIRECTV released its financial results for the first quarter 2014, reporting revenues of $7.86 billion and an adjusted operating profit of $1.51 billion, an increase of 7% over the same quarter 2013. DIRECTV also reported diluted earnings per share increase of 14% to $1.63 per share, compared to $1.43 per share for the same quarter 2013, and the company’s comparable adjusted earnings per share beat analyst estimates in three out of its last four quarters.
In announcing the DIRECTV’s financial result, the company’s President and Chief Executive Officer, Mike White, commented, “Our first quarter results continue to demonstrate the strong execution of our operations … In the U.S., operating profit before depreciation and amortization margin expanded year-over-year for the third consecutive quarter, highlighting our commitment to profitably grow our businesses through significantly improving the customer service experience, disciplined expense management and productivity initiatives.”
Given these facts, Robbins Arroyo LLP is examining the DIRECTV board of directors’ decision to sell the company to AT&T. DIRECTV shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
DIRECTV shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.