In a maneuvre worthy of the Medici dynasty, Microsoft is offering access to the contents of its $36 billion piggybank to two cable broadcasters, Comcast and Cox Communications, each vying to grab AT&T’s cable assets before AOL Time Warner can wrap its tentacles around the glittering prize.
According to those in the know, the software giant’s primary concern is ensure that AOL TW does not succeed in its bid to acquire AT&T Broadband, the largest US cable network. If successful, this would hoist AOL to pole position with over 26 million cable subscribers – a feat that would mightily miff Microsoft’s Bill Gates, given the white-hot rivalry between Gates and AOL TW [WAMN: 30-Jul-01].
The board of AT&T is scheduled to meet Saturday to count the three piles of cash spilling from their boardroom table. But a sale to any of the three contenders is not a foregone conclusion. Informed onlookers would not be surprised if AT&T decided either to remove the ‘for sale’ tag from the broadband unit or to spin it off as an independent entity.
The latter was AT&T’s original intention, timed for 2002. But the plan was thrown into disarray in July when Philadelphia-based Comcast made an unsolicited $40 billion stock swap offer to acquire the division. Although the offer was initially spurned, AT&T has since been in further talks with Comcast, Cox and several other interested parties.
However, the canny Gates is also said to have one further card up his sleeve – a direct $4bn investment in AT&T’s cable business to ensure it remains within the AT&T stable.
Any which way, save for an AOL TW victory, Gates’ dollar dangling could help secure a safe foothold for Microsoft to expand into e-commerce, entertainment and information utilizing its proprietary WebTV technology.
News source: Wall Street Journal