Sign in Subscribe
Microsoft Corp.

Comcast Faces Deadline in Mediaone Merger Talks

Strategic Insights

— 1 min read

Comcast Corporation is racing against a Thursday deadline to put together a counteroffer for the proposed merger with Mediaone Group Inc. The move comes after Mediaone sent a letter to Comcast informing the company that it intends to proceed with a proposed $58 billion stock-and-cash bid from AT&T Corporation. In the midst of intense discussions, Comcast has been exploring various options, including a potential alliance with America Online Inc. and the Microsoft Corporation. Microsoft's founder, Paul G. Allen, who has a significant stake in the cable industry, has also expressed interest in joining the bid.

Key Takeaways:

  • Comcast has a five-day timetable to come up with a counteroffer for the proposed merger with Mediaone Group Inc.
  • The company has been in discussions with America Online Inc. and Microsoft Corporation to support its bid, with Microsoft's founder, Paul G. Allen, showing interest in joining the alliance.
  • Mediaone's proposed merger with AT&T Corporation includes a $58 billion stock-and-cash bid, while Comcast's current offer is $53 billion in stock.
  • Comcast needs a cash infusion to make its bid more competitive, as offering more stock would depress the company's price.
  • The issue of control within the merged company could be a major point of contention, with Comcast's president, Brian L. Roberts, possibly resisting any arrangement that would give up control to an outsider.
  • America Online Inc. has motivation to join Comcast's bid as it seeks assurance that cable operators will offer its service to their customers.
  • Microsoft has huge cash reserves, which would make its potential bid more competitive with AT&T's offer.

Statistics:

  • $53 billion: The value of Comcast's current stock offer for Mediaone.
  • $58 billion: The value of AT&T's proposed stock-and-cash bid for Mediaone.
  • 5 days: The timeframe for Comcast to come up with a counteroffer.
  • 58 billion: The target audience for America Online Inc. in its bid to offer its service to customers.
  • 4 million: The number of subscribers owned by Microsoft's founder, Paul G. Allen, through his cable systems.
  • 1983: The year Paul G. Allen left Microsoft.

Sources:

  • People close to the discussions
  • One person close to the talks
  • A person who has long followed Comcast

Read more