DealBook Briefing: The AT&T-Time Warner Deal Showdown Is Almost Here

Good Friday morning. The showdown over AT&T’s bid for Time Warner is nigh. Qualcomm’s troubles aren’t over. Toys “R” Us shows the follies of the last round of private equity megadeals. Some links require subscriptions.

The next great M.&A. fight is ready to start

From Monday, the Federal District Court in Washington will play host to a legal battle that could determine how Americans watch “Game of Thrones” and CNN: the Justice Department’s lawsuit to block AT&T’s $85.4 billion bid for Time Warner.

It will also determine what kind of deals pass muster during the Trump administration. More from Brent Kendall and Drew FitzGerald of the WSJ:

As the media analyst Amy Yong of Macquarie told Cecilia Kang of the NYT, “This court case is so important it is hard to know where to start.”

The presiding judge expects the trial to last six to eight weeks.


Today’s DealBook Briefing was written by Andrew Ross Sorkin and Stephen Grocer in New York and Michael J. de la Merced in New Orleans.


Qualcomm won its Broadcom fight. Its battles aren’t over.

The hostile takeover bid is dead, killed by President Trump. But the other major threat to Qualcomm’s business is still around — and buying chips from it.

More from Jim Stewart of the NYT:

The Qualcomm talker: At the Corporate Law Institute in New Orleans, a top forum for deal-makers, Leo Strine of Delaware’s Court of Chancery had this to say about the blocking of Broadcom’s bid (via Michael):

Other Qualcomm news: The company’s former chairman Paul Jacobs has spoken with investors — including SoftBank, where Qualcomm is an investor in the Vision Fund — about taking the company private, unnamed sources tell the FT. And Hock Tan, Broadcom’s C.E.O., was confident of prevailing in Washington because of his November meeting with Mr. Trump.

How Toys “R” Us shows the failure of private equity

Toys “R” Us’s private equity backers had saddled it with $5 billion of debt. That classic buyout strategy might not work so well in the digital era, when spending on interest payments rather than innovation can mean handing your customers to Amazon.

More from Michael Corkery of the NYT:

Two recent bankruptcies that fit the pattern: the radio company iHeartMedia and the New York grocery chain Tops.

And an alternative reason Toys “R” Us gave for its collapse: not enough babies. Here’s a map of its U.S. stores, too.

The political flyaround

• The Dodd-Frank overhaul that passed the Senate may not pass Representative Jeb Hensarling, head of the House Financial Services Committee. He wants more changes. (Politico)

• President Trump has decided to remove H.R. McMaster as his national security adviser, unnamed sources tell the WaPo. Others — like John Kelly, Ben Carson and Jeff Sessions — may be on thin ice as well.

• Steven Mnuchin is the latest cabinet secretary being scrutinized for spending: The bill for his military flights comes close to $1 million. (Politico)

• Robert Mueller has subpoenaed the Trump Organization in recent weeks to turn over documents, including some related to Russia. (NYT)

• The Trump administration accused Russia of engineering a series of cyberattacks against American and European nuclear power plants and water and electric systems, saying hackers could have sabotaged or shut off plants at will. (NYT)

• The White House imposed sanctions on a series of Russians and Russian organizations in retaliation for interference in the 2016 presidential election and other cyberattacks. (NYT)

• Russian elites have been buying up London property through secretive shell companies for years. With tensions high, British leaders may crack down. (NYT)

• How a libel lawsuit against BuzzFeed could give Stormy Daniels a chance to talk more about Mr. Trump. (Politico)

What to expect from Spotify’s April 3 market debut

Potential investors who watched the streaming service’s three-hour webcast yesterday learned a lot about the company as it prepares to list directly on the N.Y.S.E. (A highlight: its focuses on podcasts, ads and video as new sources of revenue.)

But others still had plenty of questions. Shira Ovide of Gadfly asked whether Spotify could sustain itself on its 25 percent gross margins. And Peter Kafka of Recode asked whether the company could ever raise prices with Apple on its tail.

More on how to value Spotify from Dan Gallagher of Heard on the Street:

The changing of the guard, Wall Street edition

Lloyd Blankfein has announced his successor at Goldman Sachs. Jamie Dimon has started to outline who would replace him at JPMorgan Chase. And so the two top bankers of their generation are set to ride off into the sunset sooner rather than later.

More from Hugh Son of Bloomberg Businessweek:

Is M.B.S.’s mother involved in Saudi palace intrigue?

Saudi Arabia’s crown prince, Mohammed bin Salman, has garnered praise for expanding rights of women in the country, allowing them to drive and attend sports events. Yet his own mother may not be benefiting from that openness.

More from Carol E. Lee and Courtney Kube of NBC News:

Elsewhere in Saudi Arabia: The crown prince told CBS News that if Iran developed a nuclear bomb, the kingdom would too.

The deals flyaround

• Bayer hasn’t satisfied U.S. officials who are worried that its acquisition of Monsanto could hurt competition. (Bloomberg)

• TheSkimm, the popular newsletter service, has raised $12 million from investors like Alphabet’s GV and the Spanx co-founder Sarah Blakely, to build more subscription services. (Recode)

• Campbell’s takeover of the snack company Snyder’s-Lance is drawing plenty of skepticism from investors. (Bloomberg Gadfly)

• Meredith has hired bankers to explore a sale of Time, Fortune, Money and Sports Illustrated, unnamed sources say. (Reuters)

• U.S. investors aren’t that excited about an Aramco I.P.O. (Bloomberg)

Why did John Skipper leave ESPN abruptly?

Based on his extraordinary interview with The Hollywood Reporter, it was because of an extortion plot by someone he bought cocaine from.

More from The Hollywood Reporter:

Unanswered questions: Were the police brought in? And are there more shoes to drop from this case?

The misconduct flyaround

• Nike said it was reviewing improper conduct at the company as one of its top executives stepped down. (Bloomberg)

• Coutts & Co., the three-century-old private bank where Queen Elizabeth II keeps money, investigated allegations of physical and verbal harassment against a star banker, Harry Keogh. He was disciplined but remains at the bank. (WSJ)

The speed read

• Tesla is entering a make-or-break period: The financial consequences if it fails to boost production of the Model 3 could be severe. (WSJ)

• Li Ka-Shing, Hong Kong’s richest man, is retiring. (NYT)

• The cities shortlisted for Amazon’s second headquarters are starting to hear other companies demand the same hefty tax breaks. (WSJ)

• What will happen when the U.S. unemployment rate falls below 4 percent? Cities that already have such low joblessness rates may offer clues. (Bloomberg)

• Investors are starting to conclude that Softbank’s Masa Son can never have enough debt. (Gadfly)

• A single social media post by Rihanna appears to have erased about $800 million of Snap’s market value. (MoneyBeat)

• A look inside the coming auction of more than 2,000 objects from the collection of David and Peggy Rockefeller. (CNBC)

• The E.U. is a considering a 3 percent tax on the digital revenues of large tech companies. (Reuters)