Even if Judge Richard Leon next week permitted AT&T’s $85 billion acquisition of Time Warner, the telco can still end up a loser.
President Trump’s Department of Justice, if it loses its suit to stop the mega-merger, could appeal and ask for a stay — a delay that could stop the merger from closing for four to six months while an appellate court ponders a decision, legal experts said.
And that could be enough to rock the merger off its foundation, sources said, as the merger agreement expires on June 21.
Judge Leon is expected to rule on June 12. Ruling against the merger would kill the deal, for sure — and cast a chill on the many others lining up to gain antitrust approval.
To be assuring, while a DOJ appeal of an adverse ruling is nearly a sure thing, winning a stay is not a sure thing. In the last seven antitrust appeals in merger cases, the government has won compelling enough stays to delay the underlying merger three times, or 43 % of the time, according to a recent Bank of America analysis.
That includes in 2000, when emergency relief was granted to the Federal Trade Commission in its suit to stop HJ Heinz from buying Beech-Nut, according to the BofA analysis.
Six of those seven were FTC cases — and not DOJ cases like the AT&T fight — and the standard for getting a delay in a DOJ case is higher.
Whether Trump’s regulators could get a stay pending appeal in the AT&T case is a matter of some debate, sources similar with the case tell The Post.
When asked if the Justice Department would appeal or try to issue a stay if the judge does not rule in the government’s favor, the department’s antitrust chief Makan Delrahim played coy.
“That will be an option, we’ll have to review and see what the judge writes,” Delrahim told The Post Thursday at The Deal’s 2018 Corporate Governance Conference. He declined to discuss the matter further.
If the DOJ loses the AT&T case but wins a stay on appeal, there is a 50-50 chance the deal could fall apart before the appellate argument is even heard, according to the analysis, prepared for its hedge fund clients and reviewed by The Post.
Of course, Time Warner may just threaten to walk in hopes of winning a higher price from AT&T, one source close to the situation maintained.
The telco should have to pay more because the deal, going on two years, is taking so much time to clear — and Time Warner could attract more from other potential suitors, the source said.
AT&T announced its deal to buy Time Warner on Oct. 22, 2016.
That being said, Chief Executive Randall Stephenson’s AT&T is paying $107.50 per share, and Time Warner shares have traded mostly in the $92-to-$97 range this year.
Time Warner shares were trading at $94.96, up three cents, in early trading on Thursday.