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AT&T, Comcast ink deal
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May 5, 1999: 8:51 p.m. ET
Phone giant and Comcast avert bidding war; Comcast gets 2 million subscribers
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NEW YORK (CNNfn) - Comcast Corp. and AT&T Corp. have averted a bidding war for MediaOne Group Inc. by agreeing to divvy up the cable company themselves, according to a source close to the negotiations.
Comcast is slated to receive 2 million cable subscribers from both AT&T and MediaOne, under the terms of the deal, Reuters reported. AT&T must close its $58 billion buyout of MediaOne for the deal to work.
The terms of the AT&T buyout deal, which MediaOne's board approved Saturday -- in effect rejecting Comcast's $48 billion offer -- have not changed.
The complete details on the swaps of cable properties were not immediately available. But a source close to MediaOne said that the deal between AT&T and Comcast was "natural."
"At some point it made sense for these two to get together," the source said.
Reuters reported that Comcast will receive $1.5 billion in breakup fees that it was entitled to as part of its March 22 deal for MediaOne.
Philadelphia-based Comcast had mounted behind-the-scenes talks to improve its $48 billion offer, which was rejected by the board of MediaOne over the weekend. Other suitors such as Microsoft and America Online spoke with Comcast as well.
Published reports said Tuesday that MCI WorldCom was likely to ink a "confidentiality agreement" with MediaOne never panned out.
The deal is likely to give both AT&T and Comcast what they want -- by boosting their cable holdings. 
-- by staff writer Jamey Keaten
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