Word: comcasts
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...While we have no current plans to sell our broadband business, Comcast's offer is serious. And we are giving it serious consideration," Armstrong said in a speech to the Boston Chamber of Commerce. "The offer recognizes at least some of the value that we've created in AT&T Broadband. The question is whether it recognizes the right value...
...humiliated, he wants more money. The CEO started at AT&T promising to make Ma Bell into a one-stop-shop for local, long-distance and high-speed Internet services - which spawned his acquisitions of cable guys Tele-Communications Inc. and MediaOne (the latter in an 11th-hour, Comcast-topping bid that president Brian Roberts never forgot) for a total $90 billion a few years back...
...didn't exactly work out. Wall Street decided that the $56 billion Armstrong had paid to scuttle Comcast's planned $48 billion MediaOne purchase was a fool's price, and AT&T has been struggling ever since - selling off $18 billion of those assets and ultimately embarking on the ongoing tracking-stock breakup plan that haunts the company now - to get its stock price back...
...Armstrong had big dreams for the Broadband division, including the one where he ran it himself. But the reality that the CEO couldn't escape this week is that when Comcast - an exquisitely well-run cable operation with the highest profit margins in the business - made its unsolicited bid, AT&T stock immediately bounced up $1.98, or 12 percent, creating an immediate pop of $6.8 billion in shareholder value...
...seems as if Armstrong's new plan is to get those shareholders a big fat buyout - in the form of lots of shares in the profitable Comcast - and call it a day. Certainly Comcast's $58 billion offer - made loudly to shareholders Monday after Armstrong balked too many times in private - was just an opening bid; no decent M&A gets done at first sight. And Armstrong can wait...