Bids for AT&T upped to $38B
By Harry R. Weber
Associated Press
ATLANTA — Cingular Wireless and Britain's Vodafone Group PLC boosted their bids to $38 billion for AT&T Wireless Services Inc. yesterday, as the board of the nation's third-largest mobile phone provider mulled which company would ultimately buy it, according to people familiar with the talks.
Vodafone matched Cingular's offers in each stage of the process and did so again yesterday, a source said on condition of anonymity.
A deal with Cingular, whose latest offer is an 18 percent premium over AT&T Wireless' closing share price Friday, could slim the field of national wireless carriers from six to five, possibly easing the price wars battering the industry. However, Vodafone may have the edge because of regulatory issues, a source said, declining to elaborate.
There was no timetable on when AT&T Wireless, whose board gathered in New York, would decide which offer to select.
AT&T Wireless, Cingular and Vodafone all declined to comment on the negotiations.
"We're pretty sure we'll find out soon what's going on one way or another," a source familiar with the discussions said on condition of anonymity. A second source also familiar with the talks called the situation "very competitive and very fluid."
Atlanta-based Cingular, the nation's No. 2 mobile phone provider with 23.4 million customers, early yesterday offered $14 a share for Redmond, Wash.-based AT&T Wireless, after offering $13 a share or $35 billion over the weekend, two sources said.
Vodafone PLC of Britain also bid $35 billion over the weekend and upped its bid to $38 billion yesterday.
Other potential suitors were NTT DoCoMo of Japan, which owns 16 percent of AT&T Wireless, and Nextel Communications of Reston, Va. However, only Cingular and Vodafone submitted bids by Friday's deadline set by AT&T Wireless.
A Vodafone deal would require the British cell phone giant to sell its 45 percent stake in Verizon Wireless, the biggest mobile phone company in the United States. Verizon Communications chief executive Ivan Seidenberg has said his company would be pleased to assume full ownership of Verizon Wireless.
AT&T Wireless' share price has risen steadily in recent weeks on news that it was putting itself on the auction block. The carrier has more than 22 million subscribers, including a sizable base of corporate clients who tend to use more services and spend more money.
But the company has struggled in recent months.
Late last year, it couldn't add new subscribers because of a glitch in a new software system. The company also has acknowledged that it has lost more customers than it had gained under the new federal rules that took effect in late November allowing cell phone users to change carriers without losing their phone numbers. The company has not released specific figures.
AT&T Wireless shares closed at $11.82 Friday on the New York Stock Exchange. Markets were closed yesterday.
