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Oct 05, 2009 - 12:55 PM EDT
Steve Birenberg submits:Merger and acquisition rumors have reemerged as drivers of media stocks after a mutli-year absence. The latest rumor was posted by The Wall Street Journal in a Heard on the Street column speculating about a possible Verizon Communications Inc. (VZ) takeover of DIRECTV Group Inc. (DTV). The speculation emanated from Verizon CEO Ivan Seidenberg discussing TV as the "core product" for the company's wireless network.
Given that FiOS TV, despite having more than 2 million customers, lags far behind the major cable and satellite distributors, an acquisition of DIRECTV is a logical way to quickly expand Verizon's TV business. Of course, DIRECTV would do virtually nothing to directly help the company's fixed-line phone business, which is rapidly losing residential phone customers to cable companies and wireless substitution.
Source: Seeking Alpha (Oct 05, 2009 - 12:55 PM EDT)
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