biz.yahoo.com
What does this mean???
Sunday July 8, 6:12 pm Eastern Time
Comcast makes $44.5 bln bid for AT&T broadband unit
(UPDATE: Adds detail throughout)
By Denise Duclaux
NEW YORK, July 8 (Reuters) - Cable company Comcast Corp. (NasdaqNM:CMCSK - news) (NasdaqNM:CMCSA - news) said on Sunday that it made a $44.5 billion stock bid for AT&T Corp.'s (NYSE:T - news) broadband business in a move to create the largest U.S. cable television and high-speed Internet provider.
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Comcast, the nation's No. 3 ranked cable operator, said it would issue 1.0525 billion shares of its stock valued at $44.5 billion, based on Friday's closing price. The Philadelphia-based company said it would also assume $13.5 billion in debt owed by AT&T's core broadband business.
The merger proposal comes after months of talks between AT&T and Comcast broke down, according to a letter sent by Comcast executives to C. Michael Armstrong, the chairman and CEO of AT&T. In the letter, dated Sunday, Comcast said that it is would submit the offer to AT&T's board before a proxy statement is sent to shareholders later this month.
Comcast said it is also prepared to buy AT&T's holdings in cable properties controlled by Time Warner Entertainment (NYSE:AOL - news), Cablevision Systems Corp. (NYSE:CVC - news) and Rainbow Media Group Inc. (NYSE:RMG - news). The company said that it was prepared to assume more debt and issue more equity to buy these assets.
Comcast said the combination would create the largest broadband communications provider in the world with about 22 million subscribers concentrated largely in the United States.
AT&T Broadband is the result of the combination of AT&T's acquisition of Tele-Communications Inc. and MediaOne Group, which formed the nation's No. 1 cable television operator.
Comcast is the nation's No. 3 operator of cable television networks with properties concentrated in the Middle Atlantic states.
If the merger is consummated, Comcast said that AT&T shareholders would own a majority of the economic and voting interests of the combined company.
Last month, AT&T's Armstrong had declared that AT&T Broadband was not for sale and that the company planned to proceed with an initial public offering of the unit later this year as part of the parent's restructuring into four parts.
AT&T announced a plan last October that involves splitting its four major businesses -- wireless, consumer, business, and broadband -- into separately traded companies. AT&T Wireless, the No. 3 U.S. wireless services company, will be the first to be separated. The other businesses will be split off over the next 18 months.
Faced with falling long-distance calling prices and increased competition, AT&T has been trying to shift away from its traditional voice telephone businesses to focus on faster-growing wireless, cable television, and Internet services. It feels these businesses will be better able to flourish as separate entities.
Shares of AT&T, the No. 1 U.S. long distance telephone and cable television company, closed at $22.24 on the New York Stock Exchange on Friday. Shares of Comcast ended at $42.28 on the Nasdaq. |
