AT&T is still mulling over competing bids from cable service providers for its AT&T Broadband business, according to a statement released Sunday.
Three cable companies -- Comcast Corp., Cox Communications Inc. and AOL Time Warner Inc. -- submitted their acquisition offers for AT&T Broadband on Friday. AT&T's board of directors reviewed the bids over the weekend, and instructed management to continue discussions with all interested parties, said Eileen Connolly, an AT&T spokeswoman.
The board of directors asked bidders to rework their offers and resubmit the proposals in one week, according to The Wall Street Journal, quoting people close to the situation.
If the board and management ultimately deem the bids inadequate, plans to spin off AT&T Broadband as a separately traded company may once again be put into play. The AT&T board cautioned in its statement Sunday that there's no guarantee of an outright sale of the business unit to a bidder.
Last year, AT&T began a quest to split itself into four separate companies, one for wireless services, one for its cable and broadband Internet services, and one for its consumer long-distance business, with the remaining business services company retaining the AT&T stock market symbol. AT&T Wireless Service Inc. completed its spin-off in July.
AT&T had planned to spin off its long distance and broadband divisions in 2002, but Comcast's unsolicited US$58 billion merger offer for AT&T Broadband forced the board to table those plans and shop around for the best offer. AT&T rejected Comcast's initial offer as inadequate.
AT&T Broadband is the largest cable business in the U.S., with about 14 million subscribers, or about one in four U.S. cable customers in the U.S.
The intertwined finances of all the players involved adds a layer of complexity to AT&T Broadband's already Byzantine business, cobbled together from a $100 billion series of acquisitions. One of the principal reasons AT&T has pursued a breakup is to untangle the mess. AT&T also rejected the Comcast bid was because it was so low compared to the price the company paid to build the business.
As an example, AT&T owns a minority share of Time Warner Entertainment Co. LP (TWE), a joint venture in cable and entertainment properties with AOL Time Warner. AT&T has tried to find a way to sell off its TWE stake, either back to AOL Time Warner or to another buyer, with no luck so far, and the disposition of that stake may factor into the overall bidding for AT&T Broadband.
Any deal with AOL Time Warner for AT&T Broadband will likely draw the attention of politicians and regulators, concerned about the antitrust implications of the resulting company.
Microsoft Corp., looking to detour the expansion of rival AOL Time Warner, has reportedly backed competing bids. Microsoft has also invested in AT&T, Comcast, and Cox.