AT&T is in discussions with private-equity corporations, together with Apollo Administration, to promote a big minority stake in its DirecTV, AT&T Now and U-Verse pay-TV companies in an advanced transaction that might shift legacy property off the wi-fi provider’s stability sheet, based on individuals aware of the matter.

Underneath the phrases of the proposed deal, AT&T would retain majority financial possession of the companies, and would preserve possession of U-verse infrastructure, together with vegetation and fiber. The customer would management the pay-TV distribution operations and consolidate the enterprise on its books. The deal might embody 30% to 49% of the mixed pay-TV distribution companies, mentioned the individuals, who requested to not be named as a result of the discussions are non-public.

Last bids are due in early December, the individuals mentioned. Whereas valuations have not been decided, a deal could worth DirecTV at lower than $15 billion together with debt, two of the individuals mentioned. AT&T acquired DirecTV in 2015 for $67 billion with debt. A deal is not going to embody DirecTV’s Latin American enterprise, the individuals mentioned.

AT&T ended the third quarter with about 17 million legacy TV subscribers (DirecTV and U-verse mixed), down greater than 16% from a yr earlier. AT&T Now prospects fell 40% to 683,000.

AT&T has been below strain from traders, together with activist hedge fund Elliott Management, to divest property after buying DirecTV after which spending greater than $100 billion on Time Warner. The proposed deal construction would give AT&T money to pay down debt whereas retaining the fairness test low sufficient for a fund, corresponding to Apollo, to execute the deal itself, two of the individuals mentioned.

AT&T has pivoted away from legacy pay-TV since buying DirecTV, focusing as a substitute on including HBO Max streaming subscribers. The satellite tv for pc TV supplier has hemorrhaged millions of subscribers in recent times as prospects have fled to cable firms that additionally provide high-speed broadband or cancelled conventional bundled TV altogether.

“AT&T is making an attempt to do one thing very onerous,” Craig Moffett, a telecommunications analyst at MoffettNathanson, wrote in a be aware to shoppers after AT&T’s third quarter earnings. “They should handle a portfolio of declining companies by slashing their prices, whereas nonetheless not hurting their money technology prospects too badly, whereas concurrently discovering a method to maintain a dividend, pay down debt sufficient to placate score companies, and, all of the whereas, put money into the few progress areas they have which are worthy (wi-fi, HBO Max, and fiber-based broadband).”

Spokespeople for AT&T and Apollo declined to remark.