Comcast, AT&T set to talk

September 28, 2001 Posted: 2235 GMT

NEW YORK (CNNfn) -- As expected, Comcast Corp. signed a confidentiality agreement with AT&T Corp. Friday, which will revive negotiations for its purchase of AT&T Broadband.

The agreement will permit the two parties to exchange information but restricts Comcast from discussing with third parties that relate to AT&T without AT&T's approval.

Other companies have signed AT&T's agreement, but Comcast had balked over the stipulation that prevents it from talking to other bidders.

In mid-July, AT&T Corp. unanimously rejected Comcast's unsolicited $44.5 billion offer for AT&T's cable unit, opening the door to other potential bids.

Comcast has waited on the sidelines since then as AT&T has pitched its broadband unit to other parties, including CNNfn parent AOL Time Warner, Cox Communications, Walt Disney Co., and Microsoft.

Shares of AT&T (T: up $0.60 to $19.30, Research, Estimates) surged more than 4 percent Friday afternoon. Comcast (CMCSK: up $0.57 to $35.87, Research, Estimates) remained relatively unaffected.

News of the agreement comes as AT&T reportedly has held talks with BellSouth, Verizon Communications, SBC Communication Inc., and Qwest Communications Inc.

As reported by CNNfn.com Thursday, AT&T is open to consolidation talks with other companies, sources said. AT&T recognizes that consolidation within the telecommunications industry is going to occur and hopes to be ahead of the pack, the source said.

"AT&T wants to keep a finger on what is happening and plan for it accordingly," the source said.

However, nothing is imminent. AT&T's negotiations with any companies are "not discussions but talks," the source said.

AT&T, Comcast and BellSouth declined comment. Verizon and SBC could not be reached.

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