Clock ticks on Comcast counterbid for MediaOne

Revised offer may come as board accepts AT&T deal

NEW YORK — Comcast has just three days to come up with a new offer for MediaOne in the wake of the latter’s expected decision over the weekend to terminate its merger agreement with Comcast and sign a deal with AT&T.

Comcast was still in talks Monday with potential backers of a revised offer, including Microsoft and software billionaire Paul Allen, and will likely not announce anything until the last minute.

The intentions of one potential backer, America Online, were unclear late Monday after the Internet company refused to comment on a report that it had pulled out of negotiations. Just Thursday AOL and Microsoft signed confidentiality agreements with MediaOne, allowing discussions between the cabler and the two technology titans.

Sources said the negotiations between Comcast and its backers were extremely fluid, however, making it difficult to forecast whether the cabler would be able to organize a revised bid.

AOL pullout interpreted

MediaOne stock weakened $1.75 to $79.87 Monday while Comcast stock jumped $3.25 to $68.93, as investors interpreted the report of AOL’s pullout as a sign that Comcast was less likely to mount a new bid. AT&T stock rose 62¢ to $51.12.

At those closing prices, Comcast’s offer for MediaOne is worth $75.82 per share, while AT&T’s offer is worth $79.58.

In a statement early Monday MediaOne said its board decided to accept AT&T’s offer because it constitutes “a superior proposal” to Comcast’s bid. It noted that Comcast has five days, under the terms of its bid, to respond.

If Comcast does not respond, it will get a $1.5 billion breakup fee from MediaOne.