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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Humblefrank who wrote (40484)	5/5/1999 6:30:00 AM
From: Maya	Respond to of 50808

Here's the Microsoft - T deal details: AT&T, Comcast End Struggle For MediaOne By Elizabeth Smith NEW YORK (Reuters) - In a strange twist of circumstance, AT&T Corp. (NYSE:T - news) and Comcast Corp. (Nasdaq:CMCSA - news) cut a deal and ended an ugly bidding war for control of cable operator MediaOne Group Inc. The peace accord came in the form of a deal announced late Tuesday in which AT&T would swap cable customers with Comcast, leaving Comcast an immediate net gain of $750,000 cable customers and, ultimately, some 2 million more subscribers than it now has. Though it will cost Comcast up to $9 billion for those two million customers, the deal will catapult Comcast into the no. 3 spot in the hierarchy of the nation's cable operators, right behind Time Warner Inc. (NYSE:TWX - news) and AT&T. In return, Comcast must walk away from its bid to acquire MediaOne and offer AT&T's telephone service to its customers. Indeed, Comcast announced late Tuesday that it would not make a counterbid for MediaOne, and that it expected MediaOne to terminate a deal it struck with the cable operator in March. As part of the deal, Comcast can pay AT&T with shares of AT&T stock that it owns or subsequently acquires. In a saga that riveted investors and triggered the interest of corporate titans such as Microsoft Corp. (Nasdaq:MSFT - news) and America Online Inc. (NYSE:AOL - news), Comcast found itself up against AT&T after the nation's No. 1 long distance carrier in late April said it would pay $54 billion in cash and stock for MediaOne. That rich offer undid Comcast's earlier merger deal struck in March with Comcast for $48 billion, all in the form of nonvoting stock. MediaOne Monday indeed eschewed Comcast's offer for AT&T's, taking advantage of a clause in its contract with Comcast that gave it 45 days to consider other overtures. MediaOne must pay Comcast a $1.5-billion break-up fee. ''This is a terrific outcome for Comcast shareholders,'' Comcast President Brian Roberts said in a joint statement issued by AT&T and Comcast Tuesday night. ''...This is a different outcome than our MediaOne proposal, but it is an elegant win-win result.'' AT&T Chief Executive and Chairman C. Michael Armstrong said the arrangement made sense, adding that the swapping allowed both companies to create geographic clusters of customers that fostered more ''effective telephony competition.'' He described the deal as ''terrific news for millions of American families who now have a choice in local phone service.'' What still remains a mystery, though, is the role that Microsoft is playing behind the scenes. Speculation swirled earlier in the week that Microsoft would join forces with Comcast in a counteroffer. The New York Times reported Wednesday that Microsoft was brokering a wide-ranging partnership with AT&T that also played a part in the phone giant's success in its bid for MediaOne. The Times said Microsoft would invest $5 billion for a 2 to 3-percent stake in AT&T in exchange for a commitment from AT&T to use Microsoft's Windows operating system in new set-top boxes that AT&T will offer its cable customers. Microsoft Spokesman Tom Pilla, reached by telephone late Tuesday night, declined to comment on the news reports. Analysts Tuesday, though, hailed the proposed deal between AT&T and Comcast. ''I think it is the best thing for the cable industry and the best thing for all the companies involved,'' Merrill Lynch media analyst Jessica Reif Cohen said. Frank Dzubeck, president of Communications Network Architect Inc., said before news of the Comcast-AT&T deal was reported that Microsoft has been playing a bluff. ''Microsoft's MO has never been physical assets,'' he added. ''They don't want plant (network infrastructure). They've never been that kind of company. Having (Window) CE (software) propagate itself in (television) set-to boxes is their motivation.'' In one swift move earlier this year, AT&T became the No. 2 cable company by purchasing Tele-Communications Inc. (Nasdaq:TCOMP - news) for $55 billion. AT&T has said a MediaOne merger is important because it would give it a major cable presence in 18 of the top 20 U.S. markets, allowing it to ''bring broadband video, voice and data services to more communities more quickly than we could separately or, in MediaOne's case, with any other company.'' If it completes the MediaOne transaction, AT&T -- already with about 11 million subscribers, will unseat Time Warner Inc. as the largest cable television company in America. When Comcast and MediaOne announced their friendly agreement March 22, they said together they would have 11 million cable subscribers. In New York Stock Exchange trade Tuesday, AT&T rose $0.50 to $51.56, MediaOne fell $2.31 to $77.56, while on the Nasdaq, Comcast's Class A special common shares dropped $2.25 to $66.69 and Microsoft Corp slipped $1.81 to $78.06. dailynews.yahoo.com