More details from the WSJ:
msnbc.com
AOL Time Warner makes offer for AT&T’s cable-TV division
By Rebecca Blumenstein and Martin Peers
THE WALL STREET JOURNAL
NEW YORK, Sept. 8 — AOL Time Warner Inc. has
made an offer for AT&T Corp.’s cable-TV
division, according to people familiar with the
situation. AOL has proposed to merge AT&T
Broadband, the nation’s largest cable company,
with its Time Warner Entertainment unit, a
partnership with AT&T that own both
programming and cable systems.
UNDER SUCH AN ARRANGEMENT, AOL would
hold an interest in the range of 40% in the unit, giving AT&T
the critical majority control that it wants.
The bid stems from talks between AT&T and AOL
that started in July, when AT&T’s board unanimously
rejected Comcast Corp.’s unsolicited $40 billion stock
swap offer for the unit. AT&T had been concerned that
Comcast’s bid didn’t give enough governance to AT&T
shareholders.
No deal is expected imminently. AT&T’s board is
expected to gather bids from a number of suitors so a
variety of options can be discussed at its board meeting
later this month, beginning on Sept. 20th. Cox
Communications Inc. has also been talking to AT&T and
remains interested, according to people familiar with the
situation. Cox hasn’t submitted a formal bid yet, however,
according to those people.
One person described the situation as very fluid, but
AOL’s interest could likely rankle Microsoft Corp. and
Walt Disney Co.
A bid from AOL, whose Time Warner Cable unit has
12.7 million subscribers, could attract intense regulatory
scrutiny because it could make AOL by far the nation’s
largest cable operator with more than 25 million customers.
AT&T’s cable unit, now the largest, has 13.7 million
customers, while Comcast is the third largest with 8.5
million subscribers.
Liberty Media
Corp. Chairman John
Malone disclosed the
AOL bid at an investor
conference Friday,
according to news
reports. Liberty Media
is a significant shareholder in AOL Time Warner and Mr.
Malone personally is a large shareholder in AT&T and a
former member of the board of directors of AT&T. |
