Hot Stock Minute

AT&T reportedly in talks to buy DirecTV; Buffett abstains from Coca-Cola vote

There’s another possible media merger in the works. And Warren Buffett speaks out by staying silent. In the corresponding video, Senior Columnist Mike Santoli talks with Lauren Lyster about AT&T’s potential acquisition of DirecTV and Warren Buffett abstaining from a Coca-Cola vote on executive compensation.

AT&T reportedly in talks to buy DirecTV

AT&T (T) has approached DirecTV (DTV) about a possible takeover, according to The Wall Street Journal. The combined company would have nearly 26 million satellite or landline subscribers. The Journal reports that talks began after the Comcast (CMCSA) - Time Warner Cable (TWC) deal, that would have 30 million subscribers.

Santoli said the AT&T-DirecTV talks are in the context of the potential Comcast -Time Warner Cable deal. “AT&T feels as if they have to fill out their offering, in getting to the home in a different way with satellite,” he said.

Regarding the recent string of other M&A news, Santoli said there’s a lot demand for making deals, and it’s overdue for companies to begin making them. “We’ve said for at least a year, maybe two years, that companies with all this cash, with difficulty growing their top-line organically, should most likely be looking towards some kind of deal-making: growing by acquisition instead of trying to build it themselves.” He said it looks like it’s starting to happen in some industries, especially in media and healthcare.

Buffett takes stand on Coke executive compensation

Warren Buffett recently abstained from a Coca-Cola (KO) shareholder vote on executive compensation, likely pressuring the company to revise the plan. The vote was approved by 83% of shareholders, but The Wall Street Journal reported that the company will likely revise the plan because he abstained. Buffett’s Berkshire Hathaway (BRK-B) is the largest Coke shareholder, owning 9% of the company. The Journal reported Buffett had several meetings with Coke CEO Muhtar Kent about the matter.

Santoli said it was unfair to criticize Buffett for abstaining from the vote. “I don’t think it’s Warren Buffett’s duty, even as a 9% holder of Coke to publicly appease the opinion of those out there who want to influence Coke,” he said. “Buffet can actually approach the CEO as he’s doing right now.”

Santoli also questioned whether Buffett wants to weigh in on the compensation policies of every company in which he has a stake. “I don’t know if he wants to be put in that position,” he said.

What do you think about the recent mergers in media and healthcare? Do you think Warren Buffett should have abstained from the Coca-Cola vote? Leave a comment below or tweet us at @HotStockTeam.

View Comments (3)