Excite@Home, AT&T Finally Confirm Talks
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In brief statements issued Thursday evening, AT&T (T) said it is considering a number of options. The company confirmed talks have been held with unnamed third parties, although the statement stopped short of saying AT&T is looking to unload its position.
"The exploration of alternatives remains at the very preliminary stage and at this time, AT&T has not made any decision to pursue any particular alternative or transaction," the company said.
Excite@Home (ATHM) also released a similar statement although it was even shorter on details.
On Thursday, The Los Angeles Times reported AT&T had sent a proposal calling for a split of the company to Excite@Home's board of directors. That report came after AT&T broadband chief Leo Hindery told Reuters news service the company has held no discussions. Hindery even went as far as to call recent speculation "absurd."
AT&T is the largest shareholder in Excite@Home, with a 26 percent stake. However, the company controls 58 percent of the voting rights. Other major shareholders include cable operators Cox Communications Inc. (COX) and Comcast (CMCSA).
The proposal may hit a road block as the newspaper also reported Cox would likely oppose any deal to split Excite@Home.
Frederick Moran, Internet analyst at Jefferies & Co, said any deal reached might not end up including AOL and might also take longer than recent reports have indicated.
"Should Excite@Home uncover a possible strategic venture, it's quite possible it wouldn't necessarily include AOL. It's also quite possible AOL eventually does a deal with AT&T that doesn't include Excite@Home.
"Much speculation has surrounded Excite@Home. Clearly, they want to drive shareholder value, but there are a lot of barriers to putting these types of deals together. Therefore, there might not be news as imminently as the press has speculated," Moran said.