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AT&T eyes formal deal
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April 26, 1999: 8:33 p.m. ET
AT&T steps up MediaOne talks, as Comcast bid lurks; Bill Gates lends an ear
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NEW YORK (CNNfn) - AT&T Corp. is expected to reach a deal to buy cable giant MediaOne Inc. as early as this weekend.
According to a source familiar with the negotiations, AT&T is moving to get the MediaOne board's formal approval of AT&T's $58 billion offer quickly. Such approval, while not finalizing the deal, would either force rival bidder Comcast to raise its $49 billion offer within five days or to surrender in the battle for MediaOne.
The accelerated pace of the negotiations comes amid a chorus of concerns from high-technology circles about AT&T's surprise merger proposal unveiled last Thursday.
On Monday AT&T and MediaOne said they signed a "confidentiality agreement" that lets them negotiate on AT&T's buyout offer.
In the meantime, Comcast is in talks with a handful of cash-rich partners in the computer world who could save its planned $49 billion purchase of MediaOne from the clutches of AT&T.
Microsoft's Bill Gates, his one-time partner Paul Allen, and Steve Case of America Online Inc. spoke over the weekend with Comcast's President Brian Roberts, said a source close to Comcast Monday.
Those tycoons of technology are wary that AT&T, which has recently been on a buyout binge for cable properties, would control too much of that fast-growing market.
Cable lines are a key conduit for high-speed communications -- and thus important for the future of the Internet.
AT&T already covers a third of the U.S. market following its acquisition of TCI; buying MediaOne would give it national coverage of around 65 percent.
Microsoft, which has a small stake in Comcast, and AOL both declined comment. An Allen spokesman did not return calls.
Under its merger agreement with Comcast, unveiled March 22, MediaOne (UMG) has until May 5 -- with the possibility of a 21-day extension -- to consider other bids.
MediaOne must pay Comcast $1.5 billion in break-up fees if the deal falls through..
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