Hmmm...check this out:
biz.yahoo.com
Sunday July 8, 7:03 pm Eastern Time
Comcast Makes Bid for AT&T Broadband
By Denise Duclaux
NEW YORK (Reuters) - Cable television company Comcast Corp. (NasdaqNM:CMCSK - news; NasdaqNM:CMCSA - news) said on Sunday that it made an unsolicited $44.5 billion stock bid for AT&T Corp.'s (NYSE:T - news) broadband cable business in a move to create the largest U.S. cable television and high-speed Internet provider.
Comcast, the No. 3 U.S. cable-television company, said it made the bid for AT&T, the nation's largest cable television operator, after months of merger negotiations with AT&T failed. The offer comes as AT&T dismantles over $100 billion in acquisitions to create separate companies for its broadband, wireless, and consumer and business telephone operations.
AT&T declined to comment. AT&T last month said 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 split into four separately traded companies.
``None of this is a surprise. The big question since AT&T announced the break-up was which unit was going to be the first to be acquired,'' said independent telecommunications analyst Jeffrey Kagan.
``AT&T will cease to exist a year or two from now. All the pieces will be gobbled up and the AT&T brand name will be a nostalgic memory in the history of America business. Broadband will go, wireless will go, and some poor international company will take on the challenge of consumer and business,'' said one telecommunications industry banker who declined to be named.
Comcast 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.
In a letter sent Sunday to AT&T Chairman Michael Armstrong, 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, which boast a strong balance sheet, has been seen as the leading candidate to take over AT&T Broadband after its separation from AT&T, analysts have said. Comcast President Brian Roberts recently said the cable industry was poised for more consolidation.
``The industry has been waiting on the sidelines looking for a signal from Wall Street that it's OK. again to pursue deals. If Wall Street welcomes this tomorrow, then it could open the flood gates for the pent up demands for deals to take place,'' Kagan said.
Comcast, whose cable properties are concentrated in the Middle Atlantic states, said the combination would create the largest broadband communications provider in the world with about 22 million subscribers concentrated largely in the United 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.
AT&T Broadband was assembled through AT&T's acquisitions Tele-Communications Inc. and its unsolicited bid to acquire MediaOne Group.
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, is the first to be separated and will become an independent company on July 9. 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. |
