A takeover would trigger the disposal of both the 50 per cent stake in One2One held by MediaOne and the controlling 51 per cent stake in Telewest that AT&T would emerge with.
Speculation that both Tele-west and One2One would be sold was fuelled by AT&T's announcement that it planned $18bn-$20bn of asset disposals once the takeover goes through. A spokeswoman said: "We will be divesting non-strategic assets and clearly the main motivation for buying MediaOne was to expand our footprint in the US."
AT&T would not detail which assets would be sold off but both the One2One and Telewest stakes are regarded as non-strategic. In addition to this, regulatory considerations and AT&T's existing joint venture agreements would force disposals of the two businesses.
AT&T has already forged a $10bn global alliance with BT which includes a non-compete clause. Since both Telewest, one of the UK's three main cable operators, and One2One are competitors to BT and its mobile joint venture Cellnet, this makes disposals inevitable.
Telewest shares soared 8 per cent yesterday, rising 20.5p to 282.5p as the market sensed that the company was now in play and likely to merge or be taken over. Other telecom stocks rose in its slipstream with Cable & Wireless, which owns the other half of One2One, gaining 27p to 842p.
Telewest, which is valued at pounds 5.6bn, is already 21 per cent-owned by AT&T through its earlier acquisition of TCI. If the MediaOne bid succeeds it will inherit a further 29.9 per cent of Telewest. Normally companies are forced to make a full bid once their shareholding in another company rises above 30 per cent. It was unclear last night whether this would force AT&T to make a bid. But analysts speculated that a more likely scenario was a three-way merger between Telewest and the two other big UK cable operators, Cable & Wireless Communications and NTL.
To complicate matters further, CWC is in discussions with Telewest about an asset swap whereby Telewest would take over CWC's residential customers, paying CWC in shares, and CWC would take on Telewest's business customers.
The AT&T bid for MediaOne tops an agreed $48bn offer from the US cable giant Comcast. That deal had already prompted Cable & Wireless and MediaOne to announce the disposal of One2One, either through a trade sale or flotation which could raise anywhere between pounds 6bn and pounds 9bn.
Outlook, page 19