Executives from AT&T held talks with Microsoft and Walt Disney Company late last week in an attempt to instigate a bidding war for its cable TV business, the largest in the US with 14 million subscribers.
Microsoft is keen to prevent AT&T Broadband falling into the clutches of AOL Time Warner [WAMN: 30-Jul-01] and is considering investing in the unit or using its financial clout to prompt rival bids. Disney, meanwhile, is mulling a merger of its cable networks with AT&T’s delivery systems, with the combined entity then being spun off.
The scramble for the hand of AT&T Broadband was sparked when rival cable operator Comcast Corporation launched an unsolicited $40 billion offer for the unit, subsequently rejected by AT&T for being too low and badly structured [WAMN: 19-Jul-01]. Comcast remains a potential suitor, and may succeed if it raises its bid.
Also in the contest is Cox Communications, another cable business, which is reportedly interested in a deal. Another option open to AT&T is simply to proceed as originally planned with the launch of a tracking stock.
News source: Wall Street Journal