After mulling over proposals for its Broadband cable unit over the weekend, AT&T Corp.'s board of directors said it has instructed management to continue discussions with interested parties.
AT&T's board of directors met Dec. 8, a meeting that some observers had
hoped would decide the fate of the Broadband unit. But on Dec. 9 the board said
in a statement that it would 'evaluate the potential of all proposals to create
long-term shareowner value,' adding that there was no guarantee it would enter
into a deal for Broadband.
AT&T spokeswoman Eileen Connolly said the company 'hopes to make a
decision by the end of the year.'
She declined further comment on the talks.
So far, Comcast Corp., AOL Time Warner Inc. and Cox Communications Inc. have
submitted bids for the unit, the companies or sources said. Microsoft Corp. also
was said to be interested in backing bids by Comcast and Cox, as well as
investing in the Broadband unit if the AT&T board decides to keep the
company independent.
AT&T's board is next scheduled to meet Dec. 19, which means that bidders
would have more than a week to submit revised bids.
AT&T has three options for the cable operation: sell it, partner with
another company or keep it independent. AT&T had planned to spin off
Broadband as a separate company, but the unit was put in play after Comcast made
an unsolicited offer in July for the cable unit. That offer - now worth about
$55.6 billion - was rejected by AT&T in August.
Whether AT&T's decision to continue talks means the company is leaning
toward keeping Broadband independent is unclear.
Although AT&T recently hired three former Continental Cablevision Inc.
executives to run the unit - William Schleyer, Ron Cooper and David Fellows -
which appeared at first to signal a desire not to sell, the most recent decision
could also mean that AT&T is holding out for a more lucrative offer.
Sources have said that AT&T Broadband has revised its target numbers for
2002, which could affect cash flow and revenue forecasts for the year.
According to a Monday report in the Wall Street Journal, Broadband
internally reduced its 2002 cash flow estimate to $2.85 billion from $3.3
billion.
