Elliott Management Corp. Demands More from AT&T

The New York hedge fund wrote in a letter to AT&T that the company needed to sharpen its focus on its core assets.

The New York hedge fund investor Elliott Management Corp. disclosed that it owned a $3.2 billion or 4.4% stake in AT&T and criticized the company’s strategy. Elliott, founded by billionaire Paul Singer, is one of the biggest activist investors. Elliott recently informed AT&T that it would seek seats on its board.

Elliott called on the telecommunications giant to shed unnecessary assets and focus on its core business. Reports stated the hedge fund didn't ask the company to sell specific divisions but said it should review any assets that lack a strategic rationale, including the DirecTV satellite service and Mexican wireless operations. AT&T shares rose 4% to $37.80 in Monday morning trading.

“AT&T has been an outlier in terms of its M&A strategy,” Elliott wrote. “Most companies today no longer seek to assemble conglomerates.”

“Indeed, many of the actions outlined are ones we are already executing today,” the company said in a statement. “AT&T’s Board and management team firmly believe that the focused and successful execution of our strategy is the best path forward to create long-term value for shareholders. This strategy is driven by the unique portfolio of valuable businesses we’ve assembled across communications networks and media and entertainment.”

AT&T Chief Executive Randall Stephenson has reshaped the company in recent years by buying DirecTV and Time Warner. The deals left the company with more than $170 billion in net debt at the end of 2018.

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