Cingular Dials Up AT&T For Buyout

Cingular Wireless has made a formal offer to acquire Redmond, Wash.-based AT&T Wireless in a deal that would create the nation's largest cell phone carrier, according to a source close to the deal.

The offer was submitted to AT&T Wireless' board of directors over the weekend, the source said Tuesday speaking on condition of anonymity. Cingular's offering price includes a premium over AT&T Wireless' closing share price of $9.99 on Friday, a second source close to the deal said.

The exact price is not being released, but it is an all-cash deal, sources say. Officials from both companies declined to comment. AT&T Wireless' board was expected to wrap up a previously scheduled meeting later Tuesday. There is no word on whether it will approve the deal at the meeting.

Atlanta-based Cingular, jointly owned by BellSouth Corp. and SBC Communications, is currently the nation's second-largest wireless carrier in terms of subscribers behind Verizon. AT&T is the third-largest.

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.

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.

Shares of AT&T Wireless rose 50 cents to $10.49 on the heels of the news.

Last week, the stock jumped more than 20 percent amid numerous press reports pointing to a potential bidding war between Cingular and assorted rivals, including Nextel Communications and Vodafone PLC of Britain.