AT&T In Talks to Sell Majority Stake of Yellow Pages Division

By Lindsay Welnick Comments
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The days of Yellow Pages are gone, and AT&T knows it.

AT&T Inc. is attempting to minimize losses as it talks with Cerberus Capital Management LP to sell off the majority stake in its Yellow Pages division, according to a report by Bloomberg.

While AT&T would retain a substantial minority stake in the $1.5 billion unit, the sale would allow the carrier to cut the losses associated with increased competition from Google, Groupon and Yelp.

With time, yellow pages have become obsolete.

“There is no real market for yellow pages businesses anymore," said Craig Moffett, a Sanford C. Bernstein & Co. analyst in New York, in the report.

With sales down 16 percent last year, AT&T CEO Randall Stephenson said they, "are in a fairly steady decline," and the company is, "obviously going to have to look at areas — look at options in terms of what we do with those assets," according to Bloomberg.

Even with the sale, AT&T has lost the opportunity to exit the market with significant profits. The sale would value AT&T at 1.5 times earnings before interest, taxes, depreciation, and amortization, while Verizon Communications exited the industry when its business was valued at six times EBITDA, Moffet said in the report.

 “The window has long since closed for divesting yellow-pages businesses for a meaningful price," Moffett said.

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