Comcast to buy ATT cable unit for $70 bln -sources
By Tom Johnson and Jessica Hall
NEW YORK/PHILADELPHIA, Dec 19 (Reuters) - AT&T Corp.<T.N> is expected to sell its cable television unit to its original suitor, Comcast Corp., for about $70 billion, abandoning plans to spin off AT&T Broadband as an independent company, sources familiar with the situation said on Wednesday.
AT&T and Comcast could not be immediately reached for comment. The companies were ironing out final details of an agreement that would make Comcast the No. 1 U.S. cable television company, sources said.
The deal is valued at about $70 billion, including stock and debt, sources said, substantially more than the $44.5 billion that Comcast offered in July but less than the $100 billion AT&T spent building its cable TV network.
The pact, which ends five months of negotiations and uncertainty, would leave AT&T with its shrinking consumer and business long-distance telephone and data operations.
"Comcast was seen as having the most to lose," and the Philadelphia-based company "worked the hardest to be the winner," said one source who declined to be named.
Comcast fought a long, patient battle for AT&T Broadband, which has about 14 million subscribers. In July, Comcast<CMCSK.O><CMCSA.O> launched a $44.5 billion unsolicited takeover offer for its larger rival, but AT&T rejected that bid as inadequate and objected to the proposed voting structure, which would have given Comcast a minority equity stake but a majority voting power in the combined company.
AT&T then postponed plans to spin off the cable unit, and opened talks with other suitors, including Cox Communications Inc.<COX.N> and AOL Time Warner Inc.<AOL.N>.
Software giant Microsoft Corp. <MSFT.O> backed the takeover offers by Cox and Comcast, and made a separate offer to invest up to $5 billion in AT&T Broadband if AT&T kept it independent, sources said.
AT&T spent $100 billion assembling the cable television empire in a move to provide telephone, data and video services over cable television lines. Upgrading the cable networks became more costly and time consuming than AT&T and Wall Street expected,
AT&T stumbled under its massive debt load, and last year announced plans to break its major businesses into separately traded companies. AT&T spun off its wireless telephone business on July 9.
19:39 12-19-01
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