AT&T and Time Warner executives tried to ease investor fears of a regulatory stiff-arm to the $108.7 billion deal, driving shares of the content company down 3% in the first day of trading since the deal was officially announced.
Time Warner shares have been on the rise since Thursday when news first surfaced that it was in talks with AT&T about a possible merger. But after the deal was officially announced Saturday night, investors apparently had time to think about the intense regulatory scrutiny the deal will face.
Time Warner s hares finished the day at $86.74 per share, down 3.1% or $2.74 each and far below the $107.50 per share AT&T has agreed to pay.
Several legislators have already said that the deal should be looked at closely, adding their uneasiness with concentrating so much media power in one company. U.S. Sen. Al Franken (D-Minn.), a sharp critic of the last big vertically integrated media deal – Comcast-NBC Universal – said AT&T-Time Warner should receive the “highest level” of scrutiny from regulators. He wasn’t the only one to express some concern about the deal. Public interest groups like the Common Cause, Public Knowledge and others have come out against the merger, fearful that its sheer size would be a “dangerous” consolidation of content and distribution power. Sen. Bernie Sanders (I-Vt.), who lost the Democratic presidential nomination to Hillary Clinton, tweeted that the deal would mean “higher prices and fewer choices” for consumers.