cnnfn.cnn.com/2001/08/13/deals/att_cable -> money.cnn.com/2001/08/13/deals/att_cable/
Michael Armstrong fails to secure another bid for the cable business, the company may choose to still launch an IPO of the broadband unit, analysts said. The plans would have called for AT&T to split into four separate companies and 41 launch an IPO of the broadband unit before the end of the year, pending shareholder approval. The broadband unit, which would have traded as a tracking stock, would then be spun off as an asset based security within 12 months. AT&T CEO Armstrong may be shopping the broadband unit as a way to lure Comcast into making a higher bid. Such an agreement, typical in an auction process, prevents Comcast from discussing AT&T's financial information. But a condition contained in the agreement, the "standstill," is blocking negotiations. Earlier this month, Comcast President Brian Roberts 58 called AT&T's Armstrong in a bid to restart negotiations between the two firms. But the phone conversation resulted in the confidentiality agreement that Comcast refuses to sign, the source said. However, a source at AT&T said that the confidentiality agreement does not contain a standstill. In fact, the pact is standard and is only an attempt to prevent collusion. AT&T hopes to prevent Comcast from convincing other companies to stay out of the bidding process by promising systems or preferential carriages, the source said. Other companies interested in the broadband business have signed the agreement, the person said. Options for the cable unit AT&T is seeking competitive offers to Comcast's bid, which it considered cheap and poorly structured. Microsoft, Disney, and AT&T declined to comment on the Journal report. If AT&T goes with the spinoff option, the investor would exchange cash for equity in AT&T Broadband. Disney also could combine its cable networks with AT&T's, followed by a public offering of AT&T Broadband. An AOL partnership would draw the attention of Microsoft, its biggest competitor. Microsoft is likely to invest in AT&T's cable business, or find a bidding partner such as Comcast, in which Microsoft has a $1 billion investment, according to the report. The company could find an investor to help boost its bid, or restructure the deal more to AT&T's liking.
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