MediaOne Sale Renews Speculation of At Home, Road Runner Union
Redwood City, California, May 5 (Bloomberg) -- AT&T Corp.'s pending purchase of MediaOne Group Inc. is prompting renewed talk of a merger of At Home Corp. and Road Runner to create a company offering Internet access over cable-TV lines throughout the U.S.
AT&T already has 70 percent voting control of At Home and will get a 35 percent interest in Road Runner when it completes its $62.5 billion acquisition of MediaOne. At Home and Road Runner are No. 1 and No. 2, respectively, among Internet service providers that use cable to link customers to the Web.
Speculation about At Home and Road Runner was kindled earlier this year as cable companies that own the two services entered into a frenzied period of mergers and acquisitions. The talk was stoked again when AT&T bid for MediaOne, which owns a stake in Road Runner along with Time Warner Inc., Microsoft Corp., Compaq Computer Corp. and the closely held Advance/Newhouse Partnership.
''It makes an eventual deal between At Home and Road Runner more likely,'' said John Corcoran, a Stephens Inc. analyst who maintains a ''buy'' recommendation for At Home. ''It will move them both toward the end goal of reaching critical mass.''
At Home's shares rose 19 1/4 to 154 15/16, fueled in part by talk of a possible combination, Corcoran said.
He said a merged operation would have access to 95 million households in North America. The bigger operation could provide them with better income from content providers, advertisers and e- commerce partners, Corcoran said.
AT&T and Redwood City, California-based At Home had no comment on a possible combination with Reston, Virginia-based Road Runner.
Even if AT&T proposes a merger of the companies, it may be years before it happens, said Michael Harris, head of Kinetic Strategies Inc., a broadband research firm. AT&T's primary goal in buying MediaOne and its earlier $59.4 billion purchase of Tele- Communications Inc. is offering local telephone service over cable lines, he said.
''It's kind of a secondary concern right now,'' Harris said. ''But it's fair to say AT&T may be the impetus for getting At Home and Road Runner to the altar.''
May/05/ 99 22:30
For more stories from Bloomberg News, click here.
(C) Copyright 1999 Bloomberg L.P.
Any redistribution of Bloomberg content, including by framing or similar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News.
The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 1999 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P. |
