"I was quite surprised to see that divestiture was proposed or offered," Liberty Media Chairman Malone said in an exclusive interview with CNBC's David Faber at the Liberty Media annual investor meeting.
"Today, I would be 75 percent of it getting done on the current terms, without divestiture," Malone said. He said a month ago he would have given the deal "100 percent probability of getting done with behavioral agreements."
AT&T agreed to buy Time Warner last fall in a massive $85 billion deal. But in the latest challenge for the deal, CNBC reported last week the Department of Justice could sue to block the takeover unless AT&T agrees to sell its DirectTV division or Time Warner's Turner Broadcasting, owner of CNN.
The Justice Department has pushed back on the idea that it is trying to force a sale of either of those assets, while AT&T's CEO has said he has no intention of selling CNN.
"These deals generally get done," Malone said. "Frankly I have not read what the government's case is."
Malone is widely respected as one of the most astute dealmakers in media and cable. He built and ran his cable empire TCI from the 1970s and sold it to AT&T in 1999 for roughly $50 billion. The investor has a net worth of nearly $8 billion, according to Forbes.