TELECOM Digest OnLine - Sorted: AT&T Shareholders OK Acquistion by SBC

AT&T Shareholders OK Acquistion by SBC

Lisa Minter (lisa_minter2001@yahoo.com)
Sat, 2 Jul 2005 10:43:05 -0500

(AP) A bid to create one of the world's largest phone companies
vaulted another hurdle Thursday as AT&T Corp. investors approved SBC
Communication Inc.'s $16 billion acquisition at what will likely be
the legendary company's final annual shareholder meeting.

Nearly all the shares cast as votes approved the deal, though
investors holding nearly 30 percent of AT&T's stock did not vote at
all.

The merger still requires regulatory approvals at the federal and
state level, though the companies expect to complete the transaction
by late 2005 or early 2006.

SBC shareholders are not required to vote on the acquisition since the
number of SBC shares being issued as payment for AT&T's stock amounts
to less than a 20 percent increase in SBC's outstanding shares.

The vote to end AT&T's 130-year run as an independent company proved
bittersweet for some shareholders and employees at the meeting. Many
said they recognized the deal was necessary, yet criticized AT&T
management actions as damaging.

AT&T, based in Bedminster, N.J., has seen its core long-distance
business shrink dramatically amid growing competition from Bell rivals
like SBC, cell phones and newer technologies such as Internet-based
calling.

"We can't go it alone because of bad management, because of regulatory
constraints, because of divestiture," AT&T manager Lani Flesch of
Chicago said after the meeting as her eyes welled with tears. "We
could have had it all and instead we're being bought."

San Antonio-based SBC, the local Bell for most of the Midwest and
Southwest, expects to eliminate 13,000 jobs after the merger.

The marriage of the rivals, announced in January, would add corporate
services and a national fiber-optic network to the list of businesses
where SBC holds a dominant industry role. It is already the largest or
second-largest U.S. provider of local, long distance, wireless and
Internet services.

AT&T investors are slated to receive 0.77942 of a share of SBC common
stock and a cash dividend of $1.30 for each share of AT&T they hold.

SBC's stock closed Thursday at $23.75 a share, down 19 cents, so the
deal now values AT&T's stock at about $19.80 per share. That's about 4
percent higher than AT&T's current share price, which fell 22 cents
Thursday to close at $19.04 on the New York Stock Exchange.

AT&T Chief Executive David Dorman told shareholders the merger is a
strategic combination that will create a diversified company that can
compete globally.

"It is our view that the AT&T-SBC merger creates greater opportunity
for shareholder value in the long term," he said.

Some rivals and consumer advocates have opposed the merger as well as
the proposed purchase of MCI Inc. by Verizon Communications Inc.,
arguing that the elimination of two major competitors from the market
will lead to higher prices, less innovation and fewer product
alternatives.

AT&T Chief Financial Officer Thomas Horton said after the meeting that
as the industry restructures, consumers will see more choices from
companies offering a variety of services.

The merger has won regulatory approval in 26 states and still needs
the OK from 10 additional states and the federal government.

On the net:

AT&T: http://www.att.com
SBC: http://www.sbc.com

(c) 2005 The Associated Press.

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