AT&T may be looking into acquiring Time Warner as part of its plans to focus on media and entertainment.
Executives at the two firms held informal meetings in recent weeks, although to talk about building relations rather than discussing specific terms, Bloomberg reported.
Time Warner is the home to some premium content from brands such as HBO, CNN and Warner Bros.
Sources say Time Warner CEO Jeff Bewkes will be willing to make a deal if he gets an offer he considers fair. The firm turned down an $85-a-share offer in 2014 from 21st Century Fox, which valued it at more than $75 billion.
Currently, Time Warner’s market value is about $65 billion while AT&T’s is $238 billion.
In May, AT&T announced plans to acquire Quickplay Media, which already supports its over-the-top video and TV Everywhere services, as well as the DirecTV offerings it plans to launch later this year.
Its plan to focus on entertainment targets include companies worth $2 billion to $50 billion, with the $48.5 billion deal to acquire satellite-TV provider DirecTV last year being its biggest deal in at least 10 years.
With DirecTV, it plans to offer three options for streaming content: DirecTV Now, DirecTV Mobile and DirecTV Preview will let viewers stream content over the internet to any device.
According to the report, AT&T’s debt at the end of June stood at $120 billion following the DirecTV acquisition and $18 billion spent on an airwave auction.
Although it has $7.2 billion of cash on hand, it will probably not be able to make a deal with cash alone.
AT&T’s closest rival Verizon is also making a big splash in the media and entertainment industry, having acquired AOL last year (and has plans to buy Yahoo).