American business magnate Warren Buffett has acquired approximately 4.25 million shares in satellite broadcaster DirecTV for US$179.6m, according to an SEC filing.
DirecTV has about 705.6 million shares outstanding, which means that this share purchase…
American business magnate Warren Buffett has acquired approximately 4.25 million shares in satellite broadcaster DirecTV for US$179.6m, according to an SEC filing.
DirecTV has about 705.6 million shares outstanding, which means that this share purchase equates to a 0.6% stake in the satellite broadcaster. The acquisition was conducted via Buffett’s investment firm Berkshire Hathaway.
DirectTV’s main shareholders currently include Capital Research Global Investors (8.5%), Southeastern Asset Management (4.6%), State Street Global Advisors (4.4%), and Capital World Investors (4.3%).
In the same filing, it was also revealed that Berkshire Hathaway bought a 5% stake in IBM for approximately US$10bn. In total, the investment firm acquired shares in several companies for an aggregate value of US$59bn.
The stake acquisition in DirecTV is Buffett’s first move in the satellite TV industry and can be seen as a sign of confidence in the broadcaster’s financial prospects.
According to DirecTV’s Q3 results, Latin American operations continued to drive the company’s growth. It reported a 14% year-on-year increase in quarterly revenues to US$6.84bn with operating profit up 19% to US$1.03bn.
Much of this rise was the result of DirecTV Latin America reporting a record 957,000 gross and 574,000 net subscriber additions.
Meanwhile, DirecTV has, in recent months, been looking to increase its bundled broadband offering by partnering with US telcos. On 3 November, it signed a three-year extension to its commercial agreement with AT&T in order to continue offering a co-branded version of DirecTV’s satellite television service across the 22 states where AT&T is already present.
DirecTV CEO Michael White also said that the company could consider working with its US DTH rival Dish in order to push ahead with its nationwide broadband plans. But he added that DirecTV is focused on a fixed rather than wireless broadband offering.
Separately, DirecTV recently signed an agreement with Arianespace for the launch of a satellite that will provide services for DirecTV Latin America. The bird, expected to be placed into orbit in 2014, is currently under construction at Space Systems/Loral.
According to an Arianespace statement, the company has already been contracted for the launch of DirecTV-14 and DirecTV-15 within the same timeframe. DirecTV-15 will be built by Astrium.
