Brean Capital Trims DIRECTV's PT Following M&A Announcement

In a report published Monday, Brean Capital analyst Todd Mitchell reiterated a Buy rating on

and trimmed the price target from $96.00 to $95.00 following

announcement on Sunday that it will acquire DIRECTV for $95.00 per share. In a press release on Sunday, the companies announced that they have entered into a "definitive agreement" where AT&T will acquire DIRECTV in a stock and cash transaction for $95.00, based on AT&T's closing price. The deal is expected to close within a year subject to DOJ, FCC and shareholder approval. The analyst noted that AT&T's and DIRECTV's creation of a national MCVP has a "best-in-class" market position. Brean Capital reported that DIRECTV's video product is more competitive with x1/x2 than uVerse, and will free up capacity on AT&T's network which will enable AT&T a more competitive HSD offering. Mitchell commented that they see little risk of the deal being rejected by regulators with AT&T's HSD buildout to service 15 million customer locations. The analyst wrote, "Moreover, AT&T committed to 1) offering standalone HSD services at speeds up to 6 Mbps in at guaranteed prices for three years, 2) continuing to offer DirecTV as a standalone basis at set nationwide package prices for three years, and 3) upholding the FCC's Open Internet protections established in 2010 for three years, irrespective of whether or not the FCC reestablishes said projections following the DC Court of Appeal vacating those rules." Shares of DIRECTV jumped to $92.00 in pre-market trading, following Friday's close of $86.18. The stock fell as low as $84.61 in pre-market trading before regaining some traction. Shares opened at $84.85. AT&T shares were up as much as a half of a percent to $36.94 in Monday's pre-market trading before falling to $35.64. The stock opened at $35.99.