AT&T may be interested in Dish’s wireless-spectrum assets, Jonathan Chaplin, a Credit Suisse analyst in New York, said in a note today. The assets make Dish an appealing buyout candidate to any phone carrier because consumers increasingly want video and broadband from the same provider, he said in an interview.
The purchase would let AT&T add customers and increase their loyalty, Chaplin said. AT&T is trying to expand its U- verse TV and Internet service to boost sales as customers abandon home-phone lines and wireless competition intensifies.
“What AT&T believes, I think, is if you bundle Dish and AT&T wireless on a national basis, that would reduce churn for all products and potentially drive penetration,” said Chaplin, who has an “outperform” rating on the shares.
Dish, based in Englewood, Colorado, gained $1.31, or 5.9 percent, to $23.49 at 4 p.m. New York time in Nasdaq Stock Market trading, the largest one-day gain since March 1. The shares have gained 31 percent in the past 12 months.
Dish declined to comment on the note, according to spokesman Marc Lumpkin. AT&T declined to comment, said Brad Burns, a spokesman.
AT&T Chief Executive Officer Randall Stephenson told the Financial Times in July there was “industrial logic” to the company acquiring Dish rival DirecTV, although he said he suspected regulators would block a transaction.
Now that the Federal Communications Commission has approved new regulations governing Internet-service providers, AT&T may understand regulators’ thinking better, making it more likely to buy a satellite-TV provider, Chaplin said.
Dish, meanwhile, may want to combine with a faster, so- called fourth-generation network that AT&T is rolling out, he said. This month, Dish agreed to buy DBSD North America Inc. out of bankruptcy for about $1 billion to add wireless spectrum.
AT&T has announced or completed 42 deals in the past 10 years, according to data compiled by Bloomberg. There have been 849 satellite, telecom, cable and satellite-TV deals globally in the same period. The average disclosed premium on those deals was about 26 percent, which would value Dish at about $28 a share, based on yesterday’s closing price.
AT&T has boosted earnings growth and stock performance after making substantial acquisitions in the past, according to Chaplin, including buying Cingular Wireless, the old AT&T Corp., and BellSouth Corp.
If AT&T were to purchase Dish, rival Verizon Communications Inc. could make a bid for DirecTV, although the New York-based company doesn’t have to make a deal as urgently as AT&T, Chaplin said.
“We always felt like if one of the companies bought DirecTV, the other one would buy Dish,” Chaplin said.
Bob Varettoni, a Verizon spokesman, declined to comment.
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