NEW YORK (CNNfn) - Microsoft Corp. has signed a "confidentiality agreement" with cable company MediaOne Group Inc. to explore how the software giant might contribute to a possible new buyout bid by Comcast Corp., a source close to the matter said Thursday. Wading into the bidding war for MediaOne, Microsoft is showing an increased interest in stopping AT&T Corp. from nabbing an even-larger slice of the U.S. cable market. Microsoft owns a 5 percent stake in Comcast, which already has a $48 billion merger agreement with MediaOne. But last week, long-distance giant AT&T (T), fresh off its buyout of cabler Tele-Communications Inc., stepped in on Comcast's deal and offered $58 billion for MediaOne. Under the terms of its deal, Comcast requested that MediaOne provide operating information to Microsoft which may help Comcast save its embattled buyout bid for MediaOne. Spokesmen from MediaOne and Microsoft each declined comment.
The agreement between MediaOne and Microsoft comes just days
after sources said Comcast had sought support of Microsoft and
Internet company America Online Inc., to salvage its agreement with MediaOne, announced on March 22. MediaOne and AT&T, which unveiled a confidentiality agreement of their own earlier this week, have been in closed-door talks this week to draft a formal merger deal by as early as the weekend, sources said. Comcast would have five days to respond. The maneuvering by Microsoft is seen as a preparatory step if AT&T and MediaOne should strike a deal.
Microsoft has expressed a strong interest in cable companies,
most notably in its purchase of a $1 billion stake in Comcast last year. And Microsoft clearly has the financial wherewithal to up that stake in cable -- in its recent third-quarter report, the software kingpin was holding $21.8 billion in cash.
America Online, meanwhile, is sitting on a stock market gold
mine. Its shares have risen about 80 percent since the start of this year.
|
