TMC Senior Editor Peter Bernstein thinks AT&T may explore divestiture options next year and it is a conceivable thought. Moreover, what is worth thinking about is what will the Department of Justice do with other high-profile acquisition attempts next year. After all, Peter’s prediction is obviously made because in-part the AT&T and T-Mobile deal wasn’t approved.
Many of Peter’s predictions for next year are thought-provoking and AT&T is number one of the list. As I think about it, I wonder if other large transactions will not be attempted next year because companies are waiting to see if there is a change in administration. After all, the Obama administration has never been seen as a fan of big business or any business outside of the green technology space. Would any large company go through a major acquisition and spend millions on lawyers and fees to not only find out it isn’t allowed but moreover that they have to pay a huge break-up fee?
Perhaps just as importantly, the bankers were to make $200M on the AT&T transaction and they could have used the money since so many other parts of their business are under fire from Dodd-Frank and its revenue destroying, proprietary-trading eliminating Volcker Rule and of course Basel III which limits bank risk-taking and increases capital requirements.
Moreover – I will make a prediction that if a new administration is elected in November of next year – we will see more large mergers attempted.
Peter’s other predictions are worth reading as well… They focus on Apple, Microsoft, Visa and he has some interesting twists and turns in his logic worth following.
While on the topic of predictions I have to say I am surprised an asset like Myspace was not purchased and integrated into a well-known platform. I suggested Twitter buy them this past January and instead they were sold to Specific Media for $35M. The traffic on the site is declining but it is still in the top 138 sites in the world according to Alexa. But the chart shows page-view traffic is declining so it would make sense for Specific Media to sell this asset to someone who can do more with it in 2012. For now through the company is doing its best to keep the social networking site relevant by adding a new music player to what they say is the world’s largest music library. In addition, it allows free unlimited on-demand listening, personalized radio and improved search. Perhaps once the smartphone apps come out and if there is traction, the company will see its valuation increase.
Other than this recommendation, I am not certain I will make any predictions at this point – if I do, you’ll see them on tehrani.com so stay tuned, happy holidays and New Year!