Top US stocks to watch before the bell: AT&T and Discovery

AT&T and Discovery unveil a deal to create a new standalone streaming company, shareholders rally against the proposed takeover of At Home Group, Boeing finds new potential problems on older planes, and Royal Caribbean Cruises pulls plans to launch a new route from Israel.

USA (1)

AT&T and Discovery

Telecoms giant AT&T is separating its media assets and merging them with Discovery to create a new powerhouse in the world of streaming.

The deal will see AT&T combine assets including Warner Bros studios, CNN and HBO with Discovery, which owns lifestyle TV networks like HGTV and TLC and is known for its home, cooking and nature shows. AT&T is set to secure $43 billion in cash, debt securities and by offloading some debt through the deal. AT&T shareholders are being given stock in the new business to give them a combined stake of around 71%, with Discovery shareholders to own the other 29%.

The deal would see AT&T unwind its $109 billion acquisition of Time Warner back in 2018 and allow it to focus more on rolling-out 5G and the wider telecoms market, while Discovery will have a significantly bigger war chest under the new business as the battle in the TV and streaming market intensifies.

At Home Group

The largest shareholder of At Home Group will vote against proposals to take the retailer private because it believes the offer significantly undervalues the business.

Private equity firm Hellman & Friedman has offered $36 per share but CAS Investment Partners, which holds about a 17% stake in At Home Group, says this ‘grossly undervalues the company and deprives stockholders of anything resembling a fair premium. The investor has said an offer of over $70 per share would be more realistic.

Another shareholder, Honest Capital, has also opposed the deal as it is confident of the company’s prospects as it looks to capitalise on the boom for home décor by doubling the number of stores.

Boeing

The Federal Aviation Administration has told US operators of 143 737 Classic series airplanes to check for possible wire faults following revelations from the investigation into the crash in Indonesia in January.

The model affected is over two decades old and impacts over 1,000 planes around the world, but most of these are currently out of service as travel remains subdued during the pandemic.

It represents another blow to the plane maker, who has suffered wiring problems with newer models of its planes lately.

Royal Caribbean Cruises

Royal Caribbean Cruises has cancelled plans to launch a new trip due to run from Israel to Greece and Cyprus from next month as tensions rise in the region.

It was due to be the first sailing for its new ship named ‘Odyssey of the Seas’ that was due to capitalise on a new travel corridor established between the three countries for vaccinated travellers.

However, it has now been cancelled because of the unrest in Israel and the wider region, which has prevented it from preparing for the trip properly.

Alphabet, Microsoft and Amazon

The French government is proposing that sensitive public and corporate data can be stored in cloud computing services offered by Alphabet and Microsoft if the pair are willing to license their technology to French companies and by storing it on servers located in the country.

The country is forming a plan to address growing concerns that US businesses have over European data. Notably, Amazon, the largest cloud-computing company, was not mentioned by French finance minister Bruno Le Maire.

Stellantis and Foxconn

Automaker Stellantis and electronics manufacturing giant Foxconn will announce a strategic partnership early on Tuesday.

No further details have been revealed but a conference call will be held between Stellantis chief executive Carlos Tavares and Foxconn chairman Young Liu.

Paymentus

Billing and payments firm Paymentus has said it is targeting a $2.43 billion valuation through an IPO on the New York Stock Exchange.  

The company is planning to offer 10 million shares priced between $19 and $21 each to raise up to $210 million as it hopes to capitalise on demand for new listings, particularly tech stocks.

Paymentus is growing fast and hoping that goes in its favour, with revenue rising 32% in the first three months of 2021 to $92.2 million, driven by more people buying online over the last year.

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