In a bid to become America’s number-one cable TV operator, Comcast Corporation yesterday made an unsolicited $44.5 billion all-stock offer for AT&T’s cable business.
With sixteen million subscribers, AT&T is currently the largest cable provider in the US, although it intends to sell off networks accounting for over 2m homes. Comcast trails in third place (8.5m) behind AOL Time Warner. A combined Comcast/AT&T operation would have around 22m customers, one in every five US households.
Since AT&T announced its intention to split into three separate businesses, Comcast has been keen to merge with its cable operations. However, talks are believed to have broken down over “social issues” – namely, who would be in charge. Comcast’s father-and-son management team Ralph and Brian Roberts are unwilling to cede control to AT&T chairman C Michael Armstrong.
“Over many months of discussions we have shared a vision that AT&T Broadband and Comcast should be combined to create the world’s leader in broadband communications,” said the Roberts in a letter to Armstrong yesterday. “We believed those discussions were progressing toward a tax-free transaction that would dramatically accelerate your own plan to separate the broadband company. It is unfortunate that we were not able to agree on a basis for continuing our dialogue.”
Yesterday’s bid, they said, was an attempt “to give [the proposal] to [AT&T’s] board formally, and hopefully it will get great consideration. It’s in the interest of all their shareholders.”
AT&T’s response was unenthusiastic: “We have no current plans to sell our broadband business, including the transaction proposed today by Comcast,” it said. “We will analyze the proposal and respond in due course. Recently we have had some conversations with Comcast, but no agreements have been reached on any aspect.”
News source: New York Times