Publication Date: April 25, 2018
The final witness has taken the stand, both the Department of Justice (DoJ) and AT&T have rested their cases, and after next week’s closing arguments, we will await the ruling on a $100bn takeover by the sole presiding judge, Richard Leon. Risk arbitrage funds collectively hold approximately $7bn of Time Warner stock and their unwavering confidence prior to and during the trial has caused Time Warner shares to steadily increase, even in the face of nervousness surrounding other crowded risk arbitrage situations, NXP Semiconductors and Monsanto. In this report we explore the US competition regime, the structure of and vertical relationships within the US entertainment industry, and the trial – assessing the DoJ and AT&T briefs, arguments, evidence and witnesses, and, most importantly, Judge Leon and his likely considerations and verdict.
1. The US Antitrust Regime and a Required Burden of Proof 2. Antitrust Precedents Relevant to Time Warner / AT&T 3. The Political Backdrop: Trump 4. Layers of the Entertainment Industry and Vertical Relationships 5. The Trial: Parties’ Briefs, Arguments and Our Views on the Witnesses 6. The Trial: Judge Richard Leon and the Expected Verdict 7. Time Warner Break Price Analysis 8. Risk Arbitrage Trading Considerations Appendices A. Transcript of BNN Interview with Makan Delrahim, 24-Oct-16 B. Selected Testimonies: Competitors, Adverse and Expert Witnesses
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