April 30, 1999 11:25 AM PDT

MediaOne in talks with AOL, Microsoft

MediaOne Group, a cable operator facing takeover offers from both Comcast and AT&T, said today it has entered into confidentiality agreements with Microsoft and America Online which may lead to possible merger talks.

The No. 3 cable company, MediaOne said the agreements allow Microsoft and AOL to review the particulars of its merger agreement with cable operator Comcast.

Long distance giant AT&T has since outbid Comcast's stock offer with a $62 billion deal of its own, which includes a substantial sum of cash.

MediaOne's board plans to meet tomorrow to review AT&T's bid, Bloomberg reported, citing a person familiar with the talks.

The surprise AT&T bid leaves Comcast executives weighing their options, including a possible counteroffer. The company is reportedly seeking the help of either software giant Microsoft, which has invested $1 billion in Comcast, or No. 1 online service provider AOL, to submit a counter bid.

Marlene Dooner, Comcast's senior director of investor relations, confirmed yesterday that the cable company has held talks with both Microsoft and AOL.

AOL spokeswoman Kathy McKiernan declined comment on the news. Tom Pilla, a spokesman for Microsoft, also declined to comment.

MediaOne has until May 6 to respond to Comcast about the status of their takeover agreement.

Today's news is just the latest chapter in the battle over MediaOne and its broadband pipes.

On Tuesday, AT&T secured $30 billion in financing to cover its bid for the cable operator.

Word that either Microsoft or AOL was interested in teaming with Comcast to help salvage the cable operator's bid for MediaOne surfaced earlier this week. The move, media reports claimed, would help further the ambitions of the two players in digital television and high-speed Internet access.

News.com's Aimee Male contributed to this report.

 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.