AT&Tlooking to fend off an unsolicited suitor for its cable business, is in preliminary talks with AOL Time Warnerabout a friendly deal to merge the two companies' cable-systems operations, the Wall Street Journalreported in its online edition today.
Citing people familiar with the matter, the newspaper reported that the talks between world’stwo largest cable companies, come two weeks after Comcastmade an unsolicited $40 billion stock-swap bid for AT&T's cable business, known as AT&T Broadband.
AT&T rejected that offer last week, saying it did not reflect the "full value" of the cable assets, the newspaper said.
But in rejecting the Comcast offer, AT&T effectively put the cable business up for sale, saying it would "explore financial and strategic alternatives" and delay plans for an AT&T Broadband tracking stock, the newspaper said.
The Wall Street Journalreport said shortly after Comcast disclosed its bid, AOL and AT&T started talks.
AOL's co-chief operating officer, Mr Richard Parsons, is representing the media giant, as he knows Mr Michael Armstrong, AT&T's chairman and chief executive, the newspaper said.
The newspaper also said Mr Gerald Levin, AOL's chief executive, had also met with Mr Armstrong at least once to discuss the matter, according to a person familiar with the situation.
Mr Parsons could not be reached to comment, the newspaper said. AT&T and AOL declined to comment, the report continued.