Says market conditions are the culprit

AT&T Latin America pulled its planned initial public offering just hours before it was set to debut on the New York Stock Exchange, citing market conditions.

AT&T announced plans to spin its Latin American assets – dubbed Vrio – in March. The spin was intended to help offset some of the costs associated with the parent company's pending $108.7 billion purchase of Time Warner Inc. That purchase is currently winding through the federal courts after the U.S. Dept. of Justice sued to block it on anti-competitive grounds.

"AT&T has decided to withdraw its planned initial public offering of shares of Vrio Corp. The company made this decision based on current market conditions,” the telecom giant said in a statement.

The Vrio IPO was expected to raise as much as $650 million, according to documents filed April 13, but AT&T subsequently lowered those expectations. According to a prospectus filed on April 18, Vrio said it expected to raise about $252 million from the offering, issuing about 15 million shares – down from the 29 million previously planned. It also anticipated the stock trading in the $16 to $17 per share range, down from prior estimates of $19 to $20 per share.

AT&T’s entertainment business in Latin America mainly consists of its DirecTV Latin America satellite TV service. DirecTV Latin America has about 13.6 million subscribers and includes a 93% interest in Sky Brasil, the largest satellite company in the strongest economy in the region and Pan Americana, which includes operations in Chile, Argentina, Columbia, Venezuela and Puerto Rico. AT&T has toyed with the idea of selling the unit in the past. A Reuters report last year said it was exploring a sale of the assets, which were valued at the time at about $8 billion.