Canaccord Starts DirecTV At Hold; Hangs $95 Target

DirecTV's

cash-and-stock deal to be acquired by AT&T Inc.

will yield higher-than expected synergies for the combined companies, an analyst said Wednesday. Cannacord's Greg Miller initiated coverage on DirecTV with a Hold and $95 target. Miller expects terms of the deal will result in DirecTV holders getting $28.50 in cash and between 1.905 and 1.724 AT&T shares, depending on AT&T's share at the closing. AT&T has said it expects the combined companies will save operating costs of $1.6 billion three years after closing. Included in the so-called synergies are programming costs and cutting redundant broadcast infrastructure. Miller called the estimate "highly conservative" and if the combined companies can better cross-sell their services, "the stock price could track prior large deals." The Federal Communications Commission has set Sept. 16 as a deadline for comments on the proposed merger. Typically, a decision is made on such mergers 180 days following comment deadlines. http://www.fcc.gov/transaction/att-directv-clockhis DirecTV traded recently at $86.27 a share, down $0.35 cents.