AT&T Confident on TW Deal Amid DOJ Suit Possibility

AT&T remains confident it will close on Time Warner by year's end, despite word DOJ is considering challenging the deal, analysts said Thursday. That close could come by month's end, analyst David Barden of Bank of America emailed investors Thursday. The Wall Street Journal that day reported the agency is discussing possible settlement terms. BOA said it's standard for the agency to work along multiple fronts for merger reviews. BOA said new DOJ antitrust chief Makan Delrahim is positioning himself to have the last word on any conditions, and the company expects any conditions to be reasonable. It said the time Delrahim is taking has to do with coming up to speed on the takeover rather than with material issues. Wells Fargo's Jennifer Fritzsche emailed investors the issue might be more about Justice increasing leverage in negotiating conditions than a serious intent to block the deal, saying the DOJ would face an "uphill battle" in court trying to block the vertical merger. If the department does push back, that might indicate horizontal mergers -- like Sprint/T-Mobile -- might not fly with the administration, Wells Fargo said. DOJ didn't comment. AT&T said when the agency reviews any transaction, "it is common and expected for both sides to prepare for all possible scenarios. For over 40 years, vertical mergers like this one have always been approved because they benefit consumers without removing any competitors from the market. While we won't comment on our discussions with DOJ, we see no reason in the law or the facts why this transaction should be an exception." Time Warner closed down 3.8 percent to $94.70. BOA said AT&T Senior Executive Vice President-External and Legislative Affairs Bob Quinn indicated this week DOJ wouldn't likely approve consolidation of two national wireless carriers without creation of a fourth facilities-based player, since that would likely face political and career antitrust staff opposition. BOA said an MVNO-based cable provider also wouldn't fit that bill of a facilities-based operator. AT&T didn't comment on that.