Cingular Wins AT&T Wireless for $40.7 Bln

Reuters | February 17, 2004

[HAL9000]

LONDON (Reuters) - Cingular, the second-largest U.S. mobile phone company, has clinched AT&T Wireless, its smaller rival, after outbidding Vodafone Group Plc with a $15-per-share offer, a source familiar with the situation told Reuters.

The bid values AT&T Wireless Services Inc., the third-largest U.S. mobile phone group which put itself up for sale on January 22, at about $40.7 billion.

"That's what we've been told, but it's a fluid situation," the source said.

AT&T Wireless and Cingular are planning to host a morning press conference in the U.S., the source said.

Cingular and Vodafone declined to comment, while AT&T Wireless was not immediately available for comment.

Vodafone shares jumped over five percent to 139-1/4 pence by 3:52 a.m. EST, following an initial report of Cingular's victory on the CNBC cable network, which cited a Wall Street Journal story.

Sources close to the auction for the third-largest U.S. mobile phone group told Reuters overnight that Vodafone was considering bidding up to $39.4 billion, or $14.5 per share.

But Cingular, which is owned by cash-rich regional carriers SBC Communications Inc and BellSouth Corp, has been determined to enlarge its mobile phone arm as its parents are facing flat or shrinking fixed-line businesses.

Cingular has said it can cut costs by an annual $3.0 billion by reducing overlapping staff and assets and SBC said in January it might consider a wireless deal that hurt earnings.

[snopercod]

It should tell us something about this deal when the loser's stock price goes up.

[snopercod]

Still up on the drudgreport:

NYT: AT&T WIRELESS LEANING TOWARD VODAPHONE IN BIDDING...

[magellan]

This is a bad thing, and might not make it through based on anticompetitive grounds. I was hoping Vodaphone would win, creating two international cell phone companies with U.S. presences (T-Mobile being the other. That would open up the possibility of lowering the cost of international cell phone roaming. Of course, I also think Cingular should look to acquire a european provider, such as Orange, for the same reason.

[eno_]

Vodafone is tangled up in Verizon, and can't easily do any deals without being held hostage to their lack of a backup plan. For example, to buy ATTWS they would have to sell off VZW. But if their bid failed, they could end up with no wireless partner in the U.S.

As far as I cna figure out, Vodafone's backup plan would have been to then turn around and buy all of the combined Verizon Communications and Verizon Wireless and hope they could spin out the landline stuff without taking a bath.

[DustyMoment]

With any luck at all, this deal might hopefully be the spark that begins the telecom turnaround. So far, telecom has shown no ability to begin any sort of recovery from the Clinton recession.

Maybe this will be the match.

[from occupied ga]

This is a bad thing, and might not make it through based on anticompetitive grounds

Why do you think it's a bad thing?

[js1138]

It's a done deal

http://www.msnbc.msn.com/id/4276272/

[Orange1998]

Drudge is losing all crediability. Everyday one headline contradicts the day before. Getting to be typical rag sheet.

[Timesink]

This has nothing to do with Drudge's credibility. Every news outlet was reporting last night that Vodafone was likely to win. And indeed, they almost did. An article on the NYT site explains how Cingular only won by making a last-ditch bid during a secret conference call at 1:30 am this morning Eastern time, while all the executives at Vodafone in England were still at home asleep. By the time the Vodafone board met to approve the offer they'd made the day before, it was too late; Cingular and AT&T had already signed the paperwork.

Drudge is only guilty of being asleep (probably literally) while events changed.