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Thursday May 6 1:20 PM ET
AT&T, MediaOne Sign Merger Agreement
NEW YORK (Reuters) - AT&T Corp. (NYSE:T - news), the largest U.S. telephone company, Thursday said it signed a definitive agreement to acquire cable television company MediaOne Group Inc., formalizing a deal the two companies struck Saturday.
AT&T wooed MediaOne, the No. 3 U.S. cable company, away from rival suitor Comcast Corp. (Nasdaq:CMCSA - news), which agreed to bless the deal in exchange for getting 2 million cable subscribers from the combined company for about $9 billion.
MediaOne shareholders will receive 0.95 of a share of AT&T common stock and at least $30.85 in cash for each share of MediaOne Group stock they own.
AT&T announced its surprise bid for MediaOne on April 22. The cash and stock offer was initially valued at $58 billion, topping Comcast's all-stock $48.2 billion offer. At current stock prices, AT&T's offer is now worth about $59.7 billion.
MediaOne Saturday deemed AT&T's offer as superior to Comcast's proposal and terminated the original merger agreement with Comcast. MediaOne will pay Comcast a $1.5 billion break-up fee.
AT&T expects the MediaOne acquisition, which will make it the largest U.S. phone and cable company, to close in the first quarter of the year 2000.
''This is an excellent agreement for consumers, who will be able to take full advantage of packaged services on broadband networks,'' said MediaOne Chairman Chuck Lillis. ''Our shareholders are getting great value for their investments, and more of the nation will get a great competitive brand in the local phone market.'' |
