Malone resigns from AT&T board
By Jeffry Bartash, CBS.MarketWatch.com
Last Update: 4:22 PM ET July 10, 2001
NEW YORK (CBS.MW) - AT&T board member John C. Malone, former chief of cable giant Tele-Communications Inc., suddenly resigned Tuesday, renewing speculation that he might try to engineer his own buyout of Ma Bell's cable business.
Yet such an effort appears unlikely. Malone's Liberty Media programming business, now a subsidiary of AT&T, is set to be spun off next month and requires Malone's full attention. Indeed, he had been planning to resign from the board on Aug. 10 in tandem with the unit's separation.
In addition, Malone would have to line up tens of billions in financing at a time when capital markets are leery of investing in telecommunications issues amid an industrywide slump and U.S. economic slowdown. And any large corporate ally that could afford to bid for AT&T would probably prefer to do so on its own.
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Malone resigns from AT&T board
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Still, shares of AT&T (T: news, msgs, alerts) gained more than 10 percent on Tuesday, getting a small lift upon news of Malone's resignation. Shares had already been up in the wake of Comcast's (CMCSK: news, msgs, alerts) nearly $60 billion bid earlier this week for Ma Bell's cable broadband business. AT&T ended up $1.94 to $20.64.
AT&T confirmed Malone's resignation. A spokeswoman noted that the board will only hold one more meeting until the Liberty spinoff.
Yet AT&T's attention is likely to be absorbed by the offer for its cable business. "Much of the board will be focused on Comcast's bid," a source close to the company said. "Talks could be ongoing for a couple of weeks."
Because of his pending resignation, Malone would not have taken part in those discussions anyway, AT&T said. Malone's Liberty Media and Comcast both own stakes in some programming that runs on cable networks, including the QVC shopping channel.
Malone joined the board after he sold TCI to AT&T in 1999. While Liberty became an affiliate of AT&T, Malone engineered an agreement under which the company basically was allowed to operate independently. Liberty will be fully separated on Aug. 10.
For months, rumors have occasionally surfaced that Malone might try to assemble a group of investors to buy part or all or AT&T, though exactly how has been a mystery.
Others put more stock in speculation that the secretive Malone is more interested in acquiring a stake in DirecTV, the satellite unit of Hughes Electronics (GMH: news, msgs, alerts) .
General Motors, the owner of Hughes, has been trying to sell its satellite business for the past year. Bidders include News Corp. (NWS: news, msgs, alerts) , the media empire controlled by Rupert Murdoch, and EchoStar (DISH: news, msgs, alerts) Communications, the second biggest satellite TV operator.
On Tuesday, GM indicated that a deal with News Corp. could be imminent.
Jeffry Bartash is a reporter for CBS.MarketWatch.com |
