Sessions declines to say if White House asked about AT&T-Time Warner merger

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WASHINGTON (Reuters) – U.S. Attorney General Jeff Sessions would not say on Tuesday if White House officials contacted his department about its review of AT&T Inc’s (T.N) proposed purchase of Time Warner (TWX.N), which one analyst said the Justice Department may sue to block as soon as Wednesday.

FILE PHOTO: An AT&T logo and communication equipment is shown on a building in downtown Los Angeles, California October 29, 2014. REUTERS/Mike Blake/File Photo

“I am not able to comment on conversations or communications the Department of Justice top people have with top people at the White House,” Sessions told a House of Representatives Judiciary Committee hearing.

President Donald Trump vowed to block the $85.4 billion merger during his presidential campaign and has repeatedly criticized Time Warner’s CNN network, which he has accused of reporting “fake news.”

Reuters reported that the Justice Department demanded last week that AT&T divest DirecTV or Time Warner’s Turner Broadcasting unit in order to win approval of the deal.

AT&T Chief Executive Randall Stephenson denied last week that he had offered to sell CNN to win approval. “We’re prepared to litigate now” over the deal, he said at a forum.

Richard Greenfield, an analyst with brokerage BTIG, said in a note to clients that his firm believed that AT&T and Time Warner had been informed by the Justice Department that a lawsuit was imminent and that it could be filed as early as Wednesday.

Greenfield said multiple sources had told him there was a meeting on Tuesday between the Justice Department and AT&T where the No. 1 U.S. pay-TV provider was told it would be sued to stop the deal.

A Justice Department spokesman declined comment on the timing of any possible action. AT&T and Time Warner declined to comment.

U.S. Attorney General Jeff Sessions testifies before a House Judiciary Committee hearing on oversight of the Justice Department on Capitol Hill in Washington, U.S., November 14, 2017. REUTERS/Aaron P. Bernstein

The Justice Department could file a lawsuit as early as this month to challenge the deal, sources told Reuters last week. AT&T is preparing to fight any lawsuit aggressively and would use Trump’s attacks on CNN as part of its legal case, the sources said.

The White House said in a statement last week that Trump did not talk to Sessions about the merger and “no White House official was authorized to speak with the Department of Justice on this matter.”

Presidential adviser Kellyanne Conway told CNN last week that the White House would not interfere with the merger review.

The deal is opposed by an array of consumer groups and smaller television networks on grounds it would give AT&T too much power over the content it would distribute to its wireless customers.

The DirectTV or Turner Broadcasting concessions demanded by the Justice Department’s antitrust chief, Makan Delrahim,

suggest he changed his view of the merger since saying in a 2016

interview the deal was not “a major antitrust problem.”

Government officials have denied the divestiture requests were because of CNN, saying they were based on concerns AT&T could hike prices on rival content distributors and block innovations.

Reporting by David Shepardson; Additional reporting by Sarah Lynch and Diane Bartz; Editing by Chris Sanders and Peter Cooney

Our Standards:The Thomson Reuters Trust Principles.

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