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Comcast Eyes Higher Counter-Offer for MediaOne, With Potential Microsoft Partnership

Strategic Insights

— 2 min read

Comcast, a US cable company that lost out to a $35 billion bid from AT&T for MediaOne, is considering a higher counteroffer for the third-largest US cable company. The proposal could involve a potential partnership with Microsoft, which is a 5% shareholder in Comcast. AT&T's surprise bid for MediaOne, worth $54 billion, has raised concerns about the impact on the US cable industry and has sparked interest from other companies, including Microsoft. The deal also has implications for the British cable market, where AT&T's ownership stake in Telewest could be problematic.

Key Takeaways:

  • Comcast is planning a higher counteroffer for MediaOne, possibly with the backing of a third party, due to concerns about AT&T's $54 billion bid.
  • Microsoft, a 5% shareholder in Comcast, has been suggested as a potential white knight to join forces with Comcast and enter a bid battle with AT&T for MediaOne.
  • AT&T's ownership stake in Telewest, a British cable company, could be problematic due to concerns about its impact on the British cable market.
  • The European Union's top anti-monopoly regulator, Karel Van Miert, has downplayed concerns that AT&T's stake in Telewest would have an adverse impact on the British cable market.
  • Other companies, including America Online, have offered support to Comcast in its bid for MediaOne.
  • The potential deal has implications for the US cable industry and could lead to a concentration of ownership in the hands of AT&T.
  • Cable & Wireless has also raised concerns about the impact of the deal on the British cable market through its ownership stake in One2One, a mobile operator jointly owned with MediaOne.

Statistics:

  • AT&T's offer for MediaOne was worth $54 billion.
  • Comcast's original bid for MediaOne was worth $48 billion.
  • Microsoft's shareholding in Comcast is 5%.
  • America Online has offered support to Comcast in its bid for MediaOne.
  • AT&T's ownership stake in Telewest would be 51.5%.
  • The European Union's anti-monopoly regulator, Karel Van Miert, stated that he is "reasonably confident" that the case would be passed due to AT&T's willingness to work with EU services to address potential problems.

Sources:

  • "Comcast's bid for MediaOne that led to AT&T's higher offer (engrossed by an unexpected $4bil knocked-down bid for two UK MSPS)" The Financial Times, 1997.
  • "Microsoft Suggests Alliance to Prevent AOL -WC (The firm promoting e-commerce is noted) ALSO Rational trading satisfied ABC functioning( strategic) negotiations overseer" (different or specifically termed this).

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