AOL, AT&T in cable merger talks
Posted on: Wednesday, 10 September 2003, 06:00 CDT
AOL Time Warner Inc., the nation's second-biggest U.S. cable- television provider, may merge its TV business with larger rival AT&T Corp. to form a company with 22.5 million customers.
People familiar with the talks said the companies already own some cable systems together, and a merger would let AT&T keep a 60 percent stake in a combined cable company. AT&T in July rejected a $50.6 billion bid from Comcast Corp. for its cable unit because of concern that the family of Comcast President Brian Roberts would control as much as 49 percent of the business.
AT&T, whose shares had fallen 32 percent in the past year before Comcast's unsolicited bid, is selling assets after debt soared 81 percent last year to $65 billion. Chairman C. Michael Armstrong is talking to companies including Microsoft Corp. and Walt Disney Co. about a cable investment that leaves AT&T with control, investors have said.
"It enables [AT&T executives] to keep their jobs if they don't have to sell to Comcast," said Uri Landesman, chief investment officer of AFA Management Partners. "That's their main goal."
AOL Time Warner wants to add AT&T cable subscribers in states including Massachusetts and California to existing systems in those areas to form larger geographic clusters of customers to cut costs for new services such as digital TV, investors have said. AOL Time Warner also wants AT&T's cable subscribers so it can sell Internet service to them, investors have said.
AOL Time Warner spokesman Ed Adler declined comment, as did AT&T spokeswoman Eileen Connolly. Philadelphia-based Comcast, the No. 3 U.S. cable operator, declined to comment, spokesman Tim Fitzpatrick said.
AOL Time Warner wants to merge Time Warner Entertainment, a venture with AT&T that owns cable systems serving about 9 million of the company's 12.7 million customers, with Englewood, Colo.-based AT&T Broadband, the people said. AT&T Broadband has 13.5 million cable customers.
Bloomberg News
Related Articles
- Concurrent Technologies Corporation Awarded Competitively-Bid Marine Corps Systems Command Contract Worth up to $500 Million
- Comcast Cable Viewer Helps Apprehend Maryland Most Wanted Suspect
- Wataniya Airways Selects SabreSonic Customer Sales and Service System
- Time Warner and Comcast Complete Adelphia Communications Transactions; Comcast's Interests in Time Warner Cable Redeemed
- Comcast Denies It Wants New ESPN
- Time Warner and Comcast Set Plan to Reduce Comcast's Interest in Time Warner Cable
- Comcast Cable Gains 20,000 Customers of Dallas-Based TVMAX
- Irving, Grapevine, Lewisville and Coppell Comcast Customers to Receive New Channel Line-Up
- Cable Regulators to Look at Privacy Issues that Affect Comcast Customers
- Portland, Ore.-Area Cable Agency Asks Comcast to Answer for Privacy Policy
 |
 |
User Comments (0)
RSS Feeds