AT&T sells off assets in the Caribbean
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As pressure mounts from an activist investor, AT&T said Wednesday it will sell its wireless and wired assets in Puerto Rico and the U.S. Virgin Islands for about $2 billion to Liberty Latin America.
Why it matters: AT&T is looking for assets to sell to alleviate debt, and analysts say the properties in the hurricane-prone islands are a logical target.
- “Puerto Rico and the U.S. Virgin Islands are small markets that aren’t contiguous with the rest of AT&T’s properties, they’re not big enterprise opportunities, and they’ve been whacked by hurricanes,” said Jonathan Chaplin, an analyst with New Street Research.
The big picture: The company is feeling the heat after a letter from Elliott Management criticizing AT&T’s strategy and its past acquisitions.
- AT&T said in the announcement that it would sell $6 billion to $8 billion worth of assets this year, but this deal puts the total at $11 billion.
Yes, but: “They might have surpassed their own goal. They have probably not surpassed Elliott’s goal,” said Roger Entner, founder of Recon Analytics. “And they still have to work around that. Elliott is certainly looming here in the background.”
What's next: Analysts say to expect AT&T to divest more assets as it tries to stay ahead of the pressure.