The Justice Department, which is reviewing the $85.4 billion deal, recently presented the options to the companies, the source added, confirming reports from U.S. media and the Financial Times.
The revelation of Trump's son-in-law controversial comments came days after the reports that the US Department of Justice was forcing Time Warner to sell CNN before eventually approving the telecom giant's merger with AT&T. AT&T denied that selling CNN was under consideration. The official, who was not authorized to discuss the matter publicly, said the department rejected that offer as insufficient to resolve its concerns, which it did not specify. The deal, he said, would put "too much concentration of power in the hands of too few". Then he added: "I do feel you should have as many news outlets as you can - especially since so many are fake".
In the run-up to last year's election he vowed that as president his Justice Department would block AT&T's purchase of Time Warner.
Stephenson twice said the cable channel was not on the table. "You can dislike consolidation but still find this extremely disturbing if true". "We'll see how it all plays out", Trump said aboard Air Force One, according to the White House's official transcript of the exchange.
Nevertheless, a group of eight Democratic US senators on Friday wrote to Makan Delrahim, head of the Justice Department's antitrust division, urging the department "to oppose any attempt by the White House to interfere with antitrust law enforcement decisions, particularly for political reasons". AT&T shares rose 1.6 percent to $33.97.
If AT&T and DOJ cannot agree to conditions, the government can sue to block the deal. "It's illogical. It's why we did the deal", he said.
AT&T had previously targeted the end of the year for closing the deal, and Wall Street analysts had widely expected the deal to go through. The deal has yet to be approved by USA antitrust regulators.