IP: Three Giants Square Off in the Bidding for AT&T Broadband

[David Farber <dave () farber net>]

By ANDREW ROSS SORKINTREE of the nation's biggest cable companies lined up 
yesterday in hopes of taking over the largest one, AT&T (news/quote) 
Broadband, submitting complex bids that AT&T will begin reviewing in the 
coming days. And Microsoft (news/quote), which is already a minority 
stakeholder in AT&T, has indicated that it will financially support 
competing bids for AT&T Broadband from both the Comcast Corporation 
(news/quote) and Cox Communications (news/quote) in an effort to keep it 
out of the hands of AOL Time Warner (news/quote).Additionally, Microsoft 
has made a side deal with AT&T to support it if AT&T Broadband is spun off 
independently, executives close to the bidding said. The Comcast 
Corporation, which effectively forced AT&T to put the cable business up for 
sale in July when it made an unsolicited all-stock offer worth $44.5 
billion at the time, submitted an adjusted bid yesterday.The new offer is 
similar to the one in July, executives close to the bidding said, but the 
overall value would be lower than the summer price because Comcast's share 
price has slumped along that of other cable stocks. Unlike the July offer, 
the new Comcast bid also reflects the value of some of AT&T's stakes in 
other businesses, like its minority share of Time Warner Entertainment, the 
executives said.Comcast is the nation's third-largest cable company, with 
8.4 million subscribers.AOL Time Warner, the No. 2 cable operator, also 
submitted a bid, the executives said, though details of the offer could not 
be learned.Executives close to AOL Time Warner said the company's main 
motive might not be to acquire AT&T Broadband, but to open the door to 
negotiating a deal to buy AT&T's stake in Time Warner Entertainment. 
Indeed, AOL Time Warner included a provision in its offer to buy AT&T's 
stake in Time Warner Entertainment separately should its bid for the entire 
unit fail.

http://www.nytimes.com/2001/12/04/business/04PLAC.html

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