Jan 27, 2004 (02:01 PM EST)
NTT DoCoMo Signals Interest In Counterbid For AT&T Wireless

Read the Original Article at InformationWeek

NEW YORK (AP) -- NTT DoCoMo Inc. of Japan stepped forward Tuesday as the first potential buyer of AT&T Wireless Inc. to formally acknowledge its interest, increasing the likelihood that Cingular Wireless may encounter a bidding war to acquire the third-largest U.S. cell phone company.

The Japanese wireless company, which already owns a 16 percent stake of AT&T Wireless, also disclosed in a federal filing that AT&T Wireless has apparently set a deadline of Feb. 13 for any would-be acquirers to submit offers.

In a statement, DoCoMo said it is temporarily waiving its rights under a prior agreement as a major AT&T Wireless investor to be advised and consulted on any proposed transaction between AT&T Wireless and another company that would alter DoCoMo's ownership interest.

DoCoMo agreed to waive those rights after being notified last week that "AT&T Wireless desired to invite DoCoMo to submit a proposal" as part of the U.S. company's decision to solicit takeover bids, according to a filing with the Securities and Exchange Commission.

A source familiar with the discussions said DoCoMo did not make the decision "lightly," a sign that Cingular may face at least one serious obstacle in its reportedly formal offer to acquire Redmond, Wash.-based AT&T Wireless for about $30 billion.

So far, there's been no official confirmation of the bid from either Cingular or corporate parents SBC Communications Inc. and BellSouth Corp., but sources at those companies have leaked numerous details of an all-cash bid worth about $30 billion to various news outlets.

In reporting its fourth-quarter results on Tuesday, SBC allowed that it would probably use debt to help fund any major acquisitions, but declined to discuss any potential deals or the reported Cingular offer.

"Cingular has tried hard to position itself as leading the pack. But there's a field (of bidders) here. It's not just the party with the loose lips," the source said, on condition of anonymity. DoCoMo "thought long and hard about this, and decided they want the option to participate. It's pretty significant that they would waive their rights."

Like Cingular and Vodafone PLC of Britain, another rumored acquirer, DoCoMo has chosen the same technological path as AT&T Wireless, a factor that makes AT&T Wireless an attractive merger partner for all three of those suitors.

In Cingular's case, a merger would fill some gaping holes in that company's national network. For DoCoMo and Vodafone, both of which have operations in numerous countries, AT&T Wireless would extend their reach to a key market and their ability to offer cell service around the globe.

Sources have said that Nextel Communications has also made overtures, but that combination may be more difficult because Nextel uses a different wireless technology. Analysts also have said a Vodafone deal would be complex because the British company would need to sell its 45 percent stake in Verizon Wireless.

DoCoMo may also find a merger appealing because it has been closely involved in the development of mMode, a wireless information service on AT&T Wireless cell phones whose name was likely chosen to suggest a strong link to DoCoMo's wildly successful "i-mode" mobile Internet service.