Cingular, Vodafone boost AT&T Wireless bids

ATLANTA -- Cingular Wireless and Britain's Vodafone Group PLC increased their bids to $38 billion for AT&T Wireless Services Inc. yesterday, as the board of the nation's third-largest mobile phone provider mulled which company would ultimately buy it, according to people familiar with the talks.

Vodafone matched Cingular's offers in each stage of the process and did so again yesterday, a source said on condition of anonymity.

A deal with Cingular, whose latest offer is an 18 percent premium over AT&T Wireless' closing share price Friday, could trim the field of national wireless carriers from six to five, possibly easing the price wars battering the industry.

But AT&T Wireless appeared to be leaning toward the offer from Vodafone, executives close to the talks told The New York Times. The executives said that the company believed that a deal with Vodafone would incur less regulatory risk and that would allow AT&T Wireless management and the firm's work force to remain in tact, the Times reported on its website last night.

There was no timetable on when AT&T Wireless, whose board gathered in New York, would decide which offer to select.

AT&T Wireless, Cingular, and Vodafone all declined to comment on the negotiations.

"We're pretty sure we'll find out soon what's going on one way or another," a source familiar with the discussions said on condition of anonymity.

Atlanta-based Cingular, the nation's number two mobile phone provider with 23.4 million customers, early yesterday offered $14 a share for Redmond, Wash.-based AT&T Wireless, after offering $13 a share or $35 billion over the weekend, two sources said.

Vodafone also bid $35 billion over the weekend and upped its bid to $38 billion yesterday.

Other potential suitors were NTT DoCoMo of Japan, which already owns 16 percent of AT&T Wireless, and Nextel Communications of Reston, Va. However, only Cingular and Vodafone submitted bids by Friday's deadline set by AT&T Wireless.

A Vodafone deal would require the British cellphone giant to sell its 45 percent stake in Verizon Wireless, the biggest mobile phone company in the United States.

Verizon Communications chief executive Ivan Seidenberg has said his company would be pleased to assume full ownership of Verizon Wireless.

AT&T Wireless' share price has risen steadily in recent weeks on news that it was putting itself on the auction block.

The carrier has more than 22 million subscribers, including a sizable base of corporate clients who tend to use more services and spend more money. AT&T Wireless shares closed at $11.82 Friday on the New York Stock Exchange.