[Sndbox] AT&T Wireless For Sale

[Jen --]

AT&T Wireless set to go on auction block By Andrew Backover and Thor Valdmanis, USA TODAY AT&T Wireless' board of directors has decided to continue the process of putting the company up for sale, say two sources with knowledge of the decision, including an adviser to a company involved in AT&T Wireless' merger talks. The decision comes amid speculation that Cingular Wireless' recent bid to buy the cell phone carrier will spark a bidding war. AT&T Wireless' (AWE) shares rose as much as 7.6% Tuesday on that speculation. Cingular's acquisition proposal, submitted to the AT&T Wireless board last weekend, would give AT&T Wireless a premium over its $27 billion stock market value as of last Friday. The all-cash offer, first reported Tuesday in USA TODAY, would be spearheaded by Cingular's co-owners, local phone giants BellSouth (BLS) and SBC Communications (SBC). AT&T Wireless' board met Monday and Tuesday in a previously scheduled meeting. The company has not acknowledged Cingular's offer nor announced how it might respond. It declined comment, as did Cingular, SBC and BellSouth. Still, investors are looking for a deal. AT&T Wireless shares closed 4% higher Tuesday at $10.39. They rose more than 20% last week on speculation that a deal with Cingular or another buyer was near. The combination of Cingular, the No. 2 carrier, and No. 3 AT&T Wireless would top Verizon Wireless to become No. 1, with more than 45 million customers. Other potential suitors pegged in media reports and by industry analysts include Japan's NTT DoCoMo (DCM), which already owns 16% of AT&T Wireless, and Britain's Vodafone (VOD), which owns 45% of Verizon Wireless (VZ). While DoCoMo's plans are unknown, it will have a say in what happens based on its two AT&T Wireless board seats, stake and right to review certain transactions. Nextel Communications (NXTL), the No. 5 carrier, and Deutsche Telekom (DT), owner of No. 6 T-Mobile, round out the list of potential suitors. DoCoMo, Nextel and Deutsche Telekom have declined comment. Vodafone couldn't be reached. Analysts say consolidation is overdue in the U.S. wireless sector, which has six national carriers. Even as revenue and customers grow, carriers face marketing wars that could hurt profits. A recent federal rule that lets customers keep their cell phone numbers when switching carriers has intensified the rivalry. Analysts expect mergers to result in three or four national players in the USA. If AT&T Wireless merged with Cingular, T-Mobile or Nextel, there would be five carriers. If foreigners Vodafone or DoCoMo took over AT&T Wireless, there would still be six.     Jen --

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