Time Warner Stock Spikes on AT&T Takeover Talk

Shares soar in Friday morning trading

Last Updated: October 21, 2016 @ 8:40 AM

Time Warner’s shares jumped more than 10 percent in Friday trading, after reports that a deal with AT&T may be imminent.

Trading was briefly suspended just before 11 a.m. ET for about 10 minutes, as traders acted on news that a merger between the media company and telecom giant could happen sooner rather than later.

Thursday, Bloomberg reported that the two companies had been talking in recent weeks about ways to cooperate more closely, including a possible merger. The report described Time Warner CEO Jeff Bewkes as a “willing seller,” and said that AT&T CEO Randall Stephenson was exploring deals to bolt on more original programming and other content to his telecom company.

And earlier this month, Bloomberg reported that AT&T would look over the next three to five years to acquire media and entertainment companies valued between $2 billion and $50 billion. With a market cap north of $70 billion after Friday’s stock surge, Time Warner would be well past that upper limit.

Both companies’ stock has performed well in 2016. AT&T is up nearly 9 percent, and Time Warner has risen nearly 40 percent since the start of the year, including Friday’s run-up. To compare, the S&P 500 is up less than 5 percent year-t0-date.

As of 11:40 a.m. ET, Time Warner was still trading about 10 percent higher. AT&T’s stock is down 3 percent.