Cox Communications Inc. is hammering out the final details
of a deal to exchange more than $1 billion in AT&T Corp. stock for cable systems with
more than 300,000 subscribers.
The deal will likely be announced soon, and it would
include systems in Tulsa, Okla., and Baton Rouge, La., as well as a few smaller systems in
other parts of the country.
The Tulsa system has about 150,000 subscribers, and the one
in Baton Rouge has about 157,000 customers.
The deal would fit nicely with systems in Texas, Oklahoma,
Louisiana and Arkansas that are coming into the Cox fold with its purchase of TCA Cable TV
With the Tulsa and Baton Rouge systems, Cox would have a
superregional cluster in that area with more than 1 million subscribers.
The deal would help to fill out Cox clusters, and it could
help AT&T to win regulatory approval for its pending acquisition of MediaOne Group
Based on current valuations of about $4,000 per subscriber,
the deal could be worth about $1.2 billion.
Cox plans to pay for the systems entirely with AT&T
stock, knowledgeable sources said.
Cox owns about 33 million AT&T shares -- worth some
$1.8 billion, based on AT&T's closing price last Thursday of $54.13 per share --
as part of its involvement with Teleport Communications Group. AT&T bought TCG last
Cox had been interested in the Tulsa system before: It
planned a joint venture with Tele-Communications Inc. that would have included Cox's
Oklahoma City system, but AT&T bought TCI and the deal never happened.
Cox would not comment on the pending deal.
Another pending AT&T deal could include a major swap in
the New England market with Charter Communications, the St. Louis-based MSO controlled by
Charter has a small number of systems in New England, and
it has been looking to grow that cluster.
Most analysts said they expect a flurry of system swaps in
the immediate future with AT&T, mainly to pare down the company's subscriber
numbers in order to comply with Federal Communications Commission ownership-attribution