Leon is scheduled to announce his decision starting at 4 p.m. New York time in a D.C. courtroom that'll likely be packed with lawyers, journalists and investors. Adding to the commotion, a parade honoring the Washington Capitals' Stanley Cup championship is scheduled to end about 3 p.m. just blocks from the courthouse.
The outcome is of great interest to more than followers of AT&T and Time Warner. It's the first major deal to face opposition from the Justice Department in the Donald Trump era, making its fate of utmost importance to the M&A community. Leon, who has been on the bench since 2002, has a reputation for courtroom drama and for being unpredictable. And the case has been infused since the beginning with political undertones, as Trump routinely criticizes coverage by Time Warner's CNN.
Here are some of the key things to be aware of:
Three possible outcomes
Leon is expected to deliver remarks from the bench before his final ruling appears on the court's docket. He may read extensively from the legal reasoning that went into his decision, so beware of premature conclusions based on his review of each side's case.
He can rule in AT&T's favor and deny the government's request for an injunction, side with the Justice Department and block the deal on antitrust grounds, or rule it illegal, but allow it to go forward by meeting conditions aimed at protecting competing pay-TV companies that want access to Time Warner programming.
The government has suggested an alternative to blocking the deal: requiring AT&T to sell its DirecTV unit or preventing it from acquiring Time Warner's Turner Broadcasting.
Traders will be poised to act, even with the hearing beginning as the market closes. Investors have become more confident AT&T will win, based on the difference between the offer price of $102.87 and Time Warner's share price. The spread is smaller than when the lawsuit was filed in November.
Impact on M&A
The decision will have wide implications for future deals because there has been so little judicial guidance on antitrust issues in deals like the Time Warner takeover, which unites two companies that operate in different parts of a supply chain rather than direct competitors. Before this suit, it was practically unheard of for the Justice Department to go to court to stop so-called vertical deals.
Key witnesses: Who was most credible?
A central component of the trial was competing economic theories. The Justice Department offered Professor Carl Shapiro of the University of California at Berkeley, whose report formed the backbone of the Justice Department's suit. AT&T countered with University of Chicago Professor Dennis Carlton, who was called to the witness stands to poke holes in Shapiro's arguments. AT&T CEO Randall Stephenson, a serial acquirer with 33 takeovers completed in his 11-year run at the helm, got to pitch for his career capper.
Trump's feud with Time Warner's CNN raised questions that his administration may have influenced the Justice Department's decision to challenge deal. But Leon denied AT&T's request to disclose any communications between the White House and Attorney General Jeff Sessions about the merger and between Sessions and the department's antitrust division, keeping such speculation a mystery.
—David McLaughlin (with assistance from Erik Larson, Scott Moritz and Andrew M. Harris), Bloomberg News