AT&T head Randall Stephenson and Jesse Cohn, portfolio manager at Elliott Management Corp, met Tuesday in New York for an introductory conversation.
In a letter last week, Elliott challenged AT&T’s leadership, criticized its shift into the media business and demanded that the company shed its DirecTV satellite division and Mexican wireless operations.
The company responded by saying it is considering the sale of four regional sports networks and a stake in a TV operator in central Europe acquired through its Time Warner purchase. It is also marketing $500 million worth of real estate. Additionally, it is exploring parting with the DirecTV business, a discussion that began before Elliott launched its campaign.
Despite Elliot's demands, assets sales should be a focus for those in charge at AT&T. It has roughly $160 billion of net debt and potential buyers for DirecTV are scarce. Dish, the company that would make the most sense, is half the size and has little cash on hand and while the combination with Dish could be structured in another way there are still formidable obstacles to such a deal.
AT&T finance chief John Stephens last week said combining two satellite providers has been tried before and failed. “From a regulatory perspective, it hasn’t been successful and I don’t know that there is any change in that regulatory perspective,” he said at an investor conference.