Comcast ponders, AT&T auction flounders

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AT&T's attempt to gin up a spirited auction for its cable systems seems
to have flopped, leaving it up to suitor Comcast to figure out how to
proceed.

AT&T kicked back all three offers for AT&T Broadband to the bidders
-- Cox, AOL Time Warner and Comcast.

The auction stems from Comcast's attempt to 'bear hug' AT&T into selling
its systems by publicly announcing a hostile $58 billion offer for the cable
unit.

Comcast has firmly stood its ground and not materially increased its bid for
the AT&T Broadband.

Rule No. 1 at Comcast is 'don't bid against yourself.'

As long as Comcast executives don't smell someone clearly topping their
offer, they're sitting back.

Cox does not appear to have been very aggressive and sources say that AOL
really only offered a deal to buy AT&T's 26% of Time Warner Entertainment
for $9 billion.

Bids submitted last week and reviewed by AT&T's board were supposed to
have been final offer (though there's rarely any such thing).

But the board has kicked the offers back to the bidders. One media executive
said Comcast President Brian Roberts worries that 'AT&T could announce a
false deadline every two weeks and they'd be bidding it up in the dark.'

AT&T Chairman Mike Armstrong's fourth option is to keep the company and
spin it off to the public.

At that time Comcast could simply pounce, and tender for the independent
company's stock.

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