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Report: AT&T in Talks to buy Time Warner

(CNN MONEY) Time Warner's stock soared nearly 10% Friday on reports that telecom and media giant AT&T may make a takeover bid for the company.

The Wall Street Journal, citing anonymous sources, said that a deal could happen as soon as this weekend. (Time Warner is the parent company of CNN.)

Shares of AT&T were down 4% after the news broke.

AT&T declined to comment to CNNMoney, and Time Warner (TWX) did not immediately return requests for comment.

There was no indication how much AT&T was willing to pay for Time Warner. AT&T reportedly would use cash and its own stock to finance the deal. It is currently worth $230 billion, while Time Warner's market value is about $72 billion.

But any AT&T-Time Warner deal would be subject to a lengthy regulatory review process.

That's because an acquisition of Time Warner would cement AT&T (TTech30) as one of the country's dominant media companies, with significant control over both programming and the distribution of that programming.

AT&T recently completed the acquisition of satellite TV provider DirecTV, which has access to 20 million households in the United States and also holds the lucrative rights to the National Football League's Sunday Ticket package.

AT&T's broadband U-Verse service has another 5 million subscribers in the U.S. AT&T also still owns a huge wireless and landline phone business as well. This is the company many still know by its nickname Ma Bell after all.

With the addition of Time Warner, AT&T would gain control of household names in the media world: CNN, HBO, a collection of valuable cable channels like TNT and Cartoon Network and the Warner Bros. movie and TV studio.

A purchase of Time Warner would immediately make AT&T a global media giant, on par with cable company Comcast (CMCSA) -- which also owns NBCUniversal and DreamWorks Animation -- as well as Disney (DIS), the parent of ESPN, ABC, Lucasfilm, Pixar and Marvel.

Bloomberg reported on Thursday that talks between AT&T and Time Warner have been taking place for several weeks.

Time Warner CEO Jeff Bewkes is a "willing seller" if he "gets an offer he thinks is fair," Bloomberg said, citing an anonymous source.

This isn't the first time that Time Warner has been in play. Rupert Murdoch's Fox (FOXA) made an offer for Time Warner in 2014 but withdrew the bid after it became clear that Time Warner was not interested in a deal.

At the time, a senior source involved in the bid said Murdoch was the wrong bidder at the wrong time.

"Wait two or three years," the source said, "and Time Warner will be on the market."

Sure enough, two years later there has been anticipation on Wall Street about a potential Time Warner transaction.

Analysts believe Time Warner's portfolio of entertainment and news businesses are a logical fit with several potential buyers, including AT&T. It is also becoming clear that content can be very valuable to large technology firms as well.

To that end, there were rumors circulating on Wall Street earlier this year that Apple (AAPL,Tech30) may be interested in making a bid for either Time Warner or Netflix (NFLXTech30).

Google parent Alphabet (GOOGLTech30) and Amazon (AMZNTech30) have also been mentioned in vague trader chatter as possible acquirers of Time Warner or other big media companies.

Any deal for Time Warner could kick off another wave of mergers in the media sector.

CBS (CBS) is already said to be in talks to reunite with Viacom (VIAB), the owner of the Paramount movie studio, Nickelodeon and MTV. Sumner Redstone and his family control both companies.

A Time Warner acquisition may cause Fox and Disney to consider big deals of their own too.

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