AT&T Wants To Resolve Activist Campaign

AT&T Inc. is in talks with Elliott Management Corp. to resolve the activist investor’s campaign for change at the phone and media giant, reports The Wall Street Journal citing people familiar with the matter said.

The two sides have held a series of wide-ranging discussions since Elliott disclosed a stake in AT&T five weeks ago and publicly urged the company to make changes aimed at igniting its lackluster share performance. AT&T and Elliott could reach an agreement as soon as this month, though the talks could also fall apart, the people said.

The two sides are discussing a number of possible moves by AT&T, including a strategic review of assets that could be sold or spun off and a push to improve margins, some of the people said. AT&T could also agree to make changes to its board with input from Elliott.

AT&T recently delayed the release of its quarterly earnings, initially scheduled for next week, giving the two sides more time to reach an agreement. The Dallas company is now expected to discuss its latest results on Oct. 28, a day before it will unveil its HBO Max streaming service at an event in Burbank, Calif.

Should AT&T and Elliott come to terms by then, it would be a relatively quick turnaround compared with the traditional activist campaign. It would show AT&T is eager to avoid a drawn-out public brawl and get on with addressing the challenges to its business.

Last month, Elliott disclosed it had amassed a roughly 1% stake in AT&T. In a letter, it challenged AT&T’s leadership, criticized its shift into the media business and called on the company to review units that might not fit with its long-term strategy including its DirecTV satellite division and Mexican wireless operations.

Stephenson said the company was already pursuing some of the ideas advanced by Elliott and defended the company’s media strategy, including its takeovers of DirecTV and Time Warner. He also defended the recent promotion of John Stankey, an AT&T veteran, to the No. 2 role at the company, making him Mr. Stephenson’s heir apparent.

Stephenson, who has run AT&T for a dozen years, has privately discussed stepping aside as CEO as soon as next year, people familiar with the matter have said. The promotion of Mr. Stankey spurred Elliott to go public with its campaign, WSJ has reported.