Time Warner/AT&T: Jury’s still out on bench trial

25 April 2018 - 12:00 am UTC

With the defense resting its case and the government set to call a rebuttal witness on Thursday in the AT&T [NYSE:T] antitrust trial, the market is signaling increased confidence in the telecom giant’s chance of winning.
The net spread between AT&T’s implied offer price for Time Warner [NYSE:TWX] and Time Warner’s share price has narrowed over the past three months from close to 14% in January to around 8% in recent trading. Time Warner holders are set to receive USD 53.75 in cash and 1.437 AT&T shares per Time Warner share if the companies win the case brought by the Department of Justice (DoJ) and close the vertical merger.
One observer who has attended nearly every day of the trial that began on 19 March in the US District Court for the District of Columbia, told this news service he is convinced that the odds are overwhelmingly in favor of the companies. “It’s simple. The government has not met its burden of proof,” the source said.
But four independent antitrust attorneys say that predicting the outcomes of antitrust trials is not so simple. They say the trial is not yet over and that anything can happen. Because of that, three of the attorneys declined to predict odds for this news service.
Seth Bloom, president of Bloom Strategic Counsel and former general counsel for the Senate Judiciary antitrust subcommittee, said that if he had to guess he would say it’s 60/40 in favor of the defense, but he said “it’s not a slam dunk.”
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By Esther D’Amico