£70bn bid for Time Warner set to trigger wave of deals

THE proposed £70bn takeover of Time Warner by AT&T could trigger a wave of consolidation in the industry.

US telecoms conglomerate AT&T is bidding to gain control of film studio Warner Bros, cable TV channels HBO and CNN and a host of other media assets – but it is likely to face an uphill battle with regulators. A successful deal would combine the world’s largest telecoms firm, which owns a mobile phone business, satellite TV and internet service, with the maker of Game Of Thrones and Harry Potter.

But first it needs approval from regulators and a Senate sub-committee responsible for competition will hold a hearing in November. Competition concerns have led US presidential hopeful Donald Trump to say he would attempt to block it if he wins the election next month. A spokesman for Democratic candidate Hillary Clinton said there were a ‘number of questions and concerns’.

It stems from worries AT&T may be tempted to only offer some of Time Warner’s top shows to its mobile phone and pay TV customers. However, even if the deal is not successful, Lorna Tilbian, head of media at Numis Securities, said it had ‘fired the starting gun on the next round of consolidation between content and distribution’.

She said: ‘The old adage is that content is king. And content with distribution is King Kong.’

More people than ever are watching video on their smartphones, making the prospect of being able to offer content to mobile users more attractive.

In the UK, Sky is a potential target for Rupert Murdoch’s Twenty First Century Fox which already owns a 39pc stake.

ITV is another UK prize, having invested in ITV studios and doubling in size over the past five years. It has already considered merging with Peppa Pig owner Entertainment One, but both sides walked away.

There was also speculation that BT was considering a bid for ITV or Channel 4, but Gavin Patterson, BT chief executive, dismissed this yesterday.

AT&T boss Randall Stephenson said yesterday he expected the Time Warner acquisition to receive regulatory clearance.