Cingular offers to buy AT&T Wireless as precursor to possible bidding war

<p>Cingular Wireless has set off a possible bidding war with its more than $27 billion offer to buy AT&T Wireless _ a deal that would create the nations largest cell phone provider.</p><p>Three other cell phone providers have also contacted AT&T Wireless to express strong interest in buying the company, a source with knowledge of the situation said Tuesday on condition of anonymity.</p><p>Atlanta-based Cingular submitted its formal offer to AT&T Wireless board of directors over the weekend, two sources with knowledge of the offer said Tuesday on condition of anonymity. Cingulars offering price includes a premium over AT&T Wireless closing share price of $9.99 on Friday, one of the sources said.</p><p>The exact price is not being released, but it is an all-cash deal, sources say. It would be worth more than $27 billion based on the closing share price Friday and the 2.7 billion shares AT&T Wireless has outstanding. In addition, AT&T Wireless at the end of the third quarter had $6.1 billion in debt, which any buyer would likely have to assume, analysts say.</p><p>Officials from both companies declined to comment. AT&T Wireless board was expected to wrap up a previously scheduled meeting later Tuesday.</p><p>Analysts do not expect a deal right away because of interest from other cell phone providers. Vodafone PLC of Britain, Nextel Communications of Reston, Va., and NTT DoCoMo, Japans largest cell phone operator, are also strongly interested in buying AT&T Wireless, a source close to the deal said. It is not clear if they have made formal bids, the source said.</p><p>Cingular set off an old-fashioned bidding war, said Patrick Comack, a telecommunications analyst with Guzman and Company in Miami. This is going to take a while. Vodafone is not going to let this go without a fight. And if they try to fight, NTT DoCoMo will try to block them.</p><p>NTT owns 16 percent of AT&T Wireless and has two company officials on AT&T Wireless board, Comack said.</p><p>Cingular, jointly owned by BellSouth Corp. and SBC Communications, is the nations second-largest wireless carrier in terms of subscribers behind Verizon. AT&T is the third-largest.</p><p>Cingular, with annual revenue of about $15 billion, serves more than 23 million voice and data customers across the United States. It has been adding customers steadily the last several quarters, helping boost the earnings of its parent companies. BellSouth releases its fourth-quarter and year-end earnings on Thursday.</p><p>Redmond, Wash-based AT&T Wireless, with 21.9 million subscribers, has annual revenue of $16.5 billion. AT&T Wireless delivers advanced high-quality mobile wireless communications services, voice and data, to businesses and consumers, in the U.S. and internationally.</p><p>Shares of AT&T Wireless rose 40 cents, or 4 percent, to close at $10.39 in trading Tuesday on the New York Stock Exchange.</p><p>___</p><p>Associated Press Writer Louise Chu in Atlanta contributed to this report.</p>

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