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The Dinner Party That Led To The Merger Of AT&T And Time Warner

The Dinner Party That Led To The Merger Of AT&T And Time Warner

Peter Chernin, a notable media, entertainment and technology investor, along with AT&T Inc. (NYSE: T)'s CEO Randall Stephenson were both guests at a dinner party hosted by Glenn Hutchins, a member of AT&T's board and co-founder of private equity firm Silver Lake.

The conversation took place in August and ultimately led to AT&T's agreement to acquire Time Warner Inc (NYSE: TWX) for $107.50 per share.

According to a Bloomberg report, Chernin and Stephenson talked about the media industry and ongoing trends, including the growth of online and mobile viewing, which threatens pay-TV operators, including AT&T's DirecTV.

Stephenson credited Chernin with getting him to appreciate Time Warner''s vast library of content and that is when he began thinking that the two companies "could work together."

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A few days later, Time Warner's CEO Jeff Bewkes hosted Stephenson at Time Warner's headquarters near Central Park. The two executives were more than familiar with each other given AT&T $48 billion takeover of DirecTV which made the company one of Time Warner's largest distributors of its content.

After three hours of talks, the executives realized that both of their companies' futures are intertwined.

A merger for AT&T transitions the company into a media mogul with control over some of the world's most cherished assets in news and entertainment. The conclusions of the discussions were revealed to a total of eight people across both companies.

Future meetings to discuss the merger where held in Washington and Nashville to maintain a higher degree of secrecy versus New York City. AT&T's executives referred to the deal under a code name "Lilly" and Time Warner's executives used the code word "Rabbit."

"The more we talked about it, the more it fell into place, that there would be benefits that might be significant and might allow us to evolve the ecosystem faster," Bloomberg quoted Bewkes as saying.

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Posted-In: AT&T Time Warner Merger BloombergM&A News Offerings Events Media Trading Ideas Best of Benzinga


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