Telecom major AT&T is talks for selling its Warner Bros. Interactive Entertainment gaming division — in a deal that could fetch about $4 billion, CNBC reported.
Take-Two Interactive Software, Electronic Arts and Activision Blizzard have all expressed interest in buying the gaming business from AT&T, said the report.
Many of the video game titles within Warner Bros. Interactive are tied to Warner-owned intellectual property, including Harry Potter, Game of Thrones and The Lego Movie. The unit also owns the Mortal Kombat and the Scribblenauts series.
A deal might involve a commercial licensing agreement where AT&T can continue to get revenue from its IP, the report said.
Elliott Management, one of the investors in AT&T, is putting pressure on the telecom operator to make changes in leadership and sell non-viable business divisions to cut down its debt.
AT&T, under pressure from Elliott Management, has already decided to replace Randall Stephenson from the top position.
Former WarnerMedia CEO John Stankey is set to replace Randall Stephenson as the new chief executive officer of AT&T on July 1.
John Stankey may focus on divesting some non-telecom assets immediately after activist hedge fund Elliott Management took at $3.2 billion stake last year, calling for divestitures and leadership changes.
Elliott called for AT&T to sell non-core assets including DirecTV. The report said John Stankey does not support to sell DirecTV business.
John Stankey said AT&T is focusing on a lot of work around portfolio rationalization at Morgan Stanley’s Technology, Media & Telecom Conference in March.
AT&T acquired Time Warner for $109 billion in a deal that closed in 2018, and has about $165 billion in debt. Former Hulu CEO Jason Kilar took over as WarnerMedia’s CEO on May 1.
