News out, not official yet, but it doesn't look good for AOL
CNBC will be trashing AOL all day tomorrow, I hope we don't lose another 5-10 points but it looks like we will now.
what are everyone elses thoughts.
NEW YORK (CNNfn) - In a surprise move, Comcast Corp. and AT&T Corp. have agreed to divvy up MediaOne Group Inc. between themselves, according to sources close to the negotiations.
The deal averts a bidding war between the two communications titans and allows Comcast to walk away with a kill fee of $1.5 billion and a substantial number of new cable customers.
Under the terms of the deal reached late Tuesday, Comcast will receive 2 million cable subscribers from AT&T and MediaOne. AT&T must close its $58 billion buyout of MediaOne for the deal to work.
Also as part of the agreement, Comcast has agreed to re-sell branded AT&T local phone service across its cable lines much like a recent accord between AT&T and Time Warner Inc. Time Warner is parent to CNN and CNNfn.
AT&T and Comcast are expected to release a statement about their agreement on Tuesday evening.
The terms of the AT&T buyout deal, which MediaOne's board approved Saturday -- in effect rejecting Comcast's $48 billion offer -- have not changed.
The complete details on the swaps of cable properties were not immediately available. But a source close to MediaOne said that the deal between AT&T and Comcast was "natural."
"At some point it made sense for these two to get together," the source said.
Reuters reported that Comcast will receive $1.5 billion in breakup fees that it was entitled to as part of its March 22 deal for MediaOne.
Philadelphia-based Comcast had mounted behind-the-scenes talks to improve its $48 billion offer, which was rejected by the board of MediaOne over the weekend. Other suitors such as Microsoft and America Online spoke with Comcast as well.
Sources close to Comcast said Microsoft is aware of the deal between the cable company and AT&T, but that talks between AT&T and Microsoft are continuing -- particularly about Internet-related issues.
AT&T has agreed to sweeten the terms of its set-top box agreement with Microsoft, if the software company agreed to pull out of the deal, a source told the Los Angeles Times on Tuesday.
-- by staff writer Jamey Keaten
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