Bid for AT&T Wireless set to rise
Cingular owners said to be planning to sweeten offer
SBC Communications Inc. and BellSouth Corp., parents of Cingular Wireless LLC, plan a higher bid for AT&T Wireless Services Inc. after submitting an offer similar to Vodafone Group PLC's Friday, people familiar with the matter said.
Cingular and Vodafone proposed buying Redmond, Wash.-based AT&T Wireless for about $35 billion, according to reports in the New York Times and the U.K.'s Sunday Telegraph. The amount of any new offer by Cingular wasn't known, said one person, who requested anonymity.
AT&T Wireless wants to sell itself after suffering a higher rate of customer defections than rivals such as Verizon Wireless last quarter. SBC and BellSouth want to merge AT&T Wireless with Cingular to form the biggest US mobile carrier and remove a competitor from the market.
"Vodafone may want AT&T Wireless, but Cingular needs it," said Thomas Friedberg, an analyst at Denver-based Janco Partners Inc., who rates AT&T Wireless shares "accumulate."
"They need this to replicate Verizon's national footprint," Friedberg said.
An offer of $35 billion would equate to about $13 a share, or 10 percent more than AT&T Wireless's close Friday of $11.82. The stock rose 6.5 percent last week in anticipation that bids would exceed $11 a share.
Vodafone, which has a 45 percent stake in Verizon Wireless, is seeking to establish its own brand to gain a bigger share of the $80 billion-a-year US market.
SBC spokesman Larry Solomon, and BellSouth spokesman Jeff Battcher didn't return calls. AT&T Wireless David Caouette declined to comment. Vodafone spokesman Ben Padovan wouldn't comment on reports that Vodafone had bid $35 billion.
NTT DoCoMo Inc. of Japan, which owns a 16 percent stake in AT&T Wireless, and Nextel Communications Inc. declined to make offers after initially expressing interest, the Wall Street Journal reported yesterday. AT&T Wireless had told suitors it would make a final decision by the end of the month, people familiar have said.
