1 Easy Step To Improve On AT&T's Dividend

Welcome to the Dividend issue of M&A Daily
AT&T
AT&T (NYSE: T) has a dividend of around 4.8%. However, if you have any of its common stock in a tax-advantaged account, you might be able to do better. They are currently buying Time Warner (NYSE: TWX) in a deal with a $13.45 arb spread which offers a 14% IRR if the deal closes by year-end. One strategy would be to sell all of your AT&T shares and replace them with TWX shares. Those shares will get $53.75 in cash and another $53.75 in T shares subject to a collar.
The deal's regulatory hurdles are surmountable. The regulators likely to face this deal are likely to be less aggressive than their Obama administration predecessors. The political sensitivity is mostly limited to CNN, which could be sold if necessary to appease President Elect Trump's Twitter (NYSE: TWTR) fury.
Once you get back your stake in T, you will get the same dividend you did before, but with a lower cost/denominator than the shares you swapped out (so a higher yield relative to your cost). If you are particularly enthusiastic about AT&T and Time Warner, you could even consider doubling the number of dollars allocated to Time Warner (since the position size will be reduced by about half if and when the cash component of the proceeds is distributed to shareholders).
Western
HSR was re-filed on January 11 for the Western (NYSE: WNR) acquisition by Tesoro (NYSE: TSO).
Level 3
HSR was re-filed on January 12 for... Read more