Deal Structure
AT&T offered this price per share for Time Warner
$107.50
This competitor acquired AOL and Yahoo to build a digital advertising platform
Verizon
Janey Frank used this valuation method to estimate Time Warner’s intrinsic value based on projected future cash flows
DCF
Compared to the EBITDA range shown in the Exhibits, AT&T’s implied purchase multiple for Time Warner appeared higher or lower
Higher / aggressive / above comparables
What year did Time Inc. acquire Warner Communications Inc. to eventually form Time Warner
1990
AT&T’s offer represented approximately this premium over the $79.50 pre-announcement price
35%
The AT&T–Time Warner merger is best described as this type of integration
Vertical integration
Using Janey Frank’s model, Time Warner’s estimated value per share was closest to this amount
~$70/share
Verizon spent this amount to acquire Yahoo!’s core portal and search engine businesses
$4.8bn
This premium TV network behind Game of Thrones was one of Time Warner’s most valuable assets
HBO
The $107.50 consideration was structured as this mix of cash and stock
50% cash / 50% stock
In 2015, AT&T acquired this satellite TV provider for $48.5B before pursuing Time Warner
DIRECTV
What beta was used in the DCF valuation of Time Warner?
1.9
In the Exhibits, most comparable media transactions occurred within this approximate EBITDA multiple range
About 10×–13× EBITDA
This 24-hour news channel owned by Turner Broadcasting was part of Time Warner
CNN
To finance the cash portion of the Time Warner acquisition, AT&T arranged $40 billion in bridge loans from these two banks
JPMorgan Chase and Bank of America Merrill Lynch
This company offered $80B for Time Warner in 2014 before being rejected
21st Century Fox
What terminal growth rate did Janey Frank apply after year five in her model?
3%
Which comparable transaction had the highest EBITDA multiple in Exhibit 6, making it a clear outlier?
Comcast / DreamWorks
This Turner-owned cable channel broadcasts NBA games and was part of Time Warner’s television network portfolio
TNT
If Time Warner accepted another bidder, it owed AT&T this breakup fee
$1.725B
This media network operator was NOT part of Time Warner’s business segments
Comcast SportsNet
What was the weight of equity used in calculating Time Warner's WACC?
79%
The Comcast acquisition of DreamWorks in Exhibit 6 was considered an outlier largely because its EBITDA multiple was approximately this level
32×
This DC superhero franchise featuring Batman was produced by Warner Bros
The Dark Knight trilogy