AT&T Inc. T is in discussions with multiple companies to sell its subsidiary Warner Bros. Interactive Entertainment, according to a CNBC report Friday.
What Happened
Multiple companies, including Electronic Arts Inc. EA, Activision Blizzard, Inc. ATVI, and Take-Two Interactive Software Inc. TTWO, have expressed interest in purchasing the video game unit, CNBC reported.
A deal, if finalized, could fetch AT&T as much as $4 billion, according to CNBC. The Dallas conglomerate had acquired Times Warner, of which the gaming division is a part, for about $109 billion in 2018.
CNBC learned that AT&T is likely to strike a deal where it continues to receive compensation for intellectual property from the games even after the unit is sold. Some of the major Warner video games are based on AT&T-owned franchises like Harry Potter, Game of Thrones, and The Lego Movie.
Why It Matters
It isn't immediately clear why AT&T is looking to sell the gaming unit. Activist investment firm Elliott Management Corp. revealed a $3.2 billion stake in the telecommunication giant in September last year and has since pushed for divestment in non-core holdings, including DirecTV.
AT&T last month raised $12.5 billion in a debt offering, as reported by Bloomberg.
AT&T Price Action
AT&T shares closed nearly 1.1% higher at $30.5 on Friday and inched slightly higher in the after-hours session.
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