AOL Joins Possible Suitors for AT&T; Unit

AOL Time Warner Inc. has signed a confidentiality agreement with AT&T; Corp., enabling the media giant to look at the financial information of the telecommunications giant’s cable unit, according to people familiar with the situation.

For the last three months, AT&T; has been talking with AOL and other parties interested in buying or merging with its AT&T; Broadband cable unit, the nation’s largest.

AT&T; began weighing a sale after Comcast Corp., the nation’s third-ranked cable operator, made an unsolicited bid in July for AT&T;’s cable business, whose financial performance has deteriorated in the last two years. AT&T; rejected that offer as insufficient and has since signed confidentiality agreements with Comcast as well as Cox Communications.

Sources say AT&T; has given the three parties until the end of this month to put final offers on the table. Although Comcast’s offer proposes an outright acquisition of the cable assets, Cox and AOL would merge their cable assets into a spun-off AT&T; Broadband.