AT&T Wireless officially exploring sale
It has hired Merrill Lynch and a New York law firm to evaluate offers
January 22, 2004 12:00 PM ETIDG News Service -
The board of directors of AT&T Wireless Services Inc. is exploring the sale of the company, AT&T Wireless officials confirmed today.
CEO John Zeglis told financial analysts during an earnings announcement that there has been "much interest" in the company, although AT&T Wireless officials declined to name suitors or set a timeline for any sale.
The company also issued a four-paragraph statement (download PDF) saying that it has decided to "explore strategic alternatives" as a result of "significant interest" from a number of companies.
"The board will consider the company's options and determine the course of action that is in the best interests of its shareholders," the statement said. The company has hired Merrill Lynch & Co. and Wachtell, Lipton, Rosen & Katz, a New York law firm, to evaluate offers, according to the press release.
According to media reports, Cingular Wireless, NTT DoCoMo Inc., Vodafone Group PLC, T-Mobile USA Inc. and Nextel Communications Inc. are all interested in buying AT&T Wireless.
AT&T Wireless was spun off from AT&T Corp. in 2001 and is now completely separate. It uses the AT&T name through a licensing arrangement.
Because it has a fairly strong financial position, AT&T Wireless will be in the driver's seat in sales negotiations, Jeff Kagan, an independent telecommunications analyst, said in an e-mail. "I am sure their shareholders are loving it, because they don't have to do a deal unless it benefits them," Kagan wrote. "What a great position to be in."
AT&T Wireless postponed an analysts meeting next week in order to focus on sale negotiations, he said. "They are the belle of the ball right now. Now they can take the time they need to evaluate, without distraction, all the various companies and approaches. AT&T Wireless is in no rush to make a decision. There is no pressure on them. In fact, one option is not to merge at all."
Company spokesman Peter Rowe said he couldn't comment further, but he emphasized the highlights of AT&T Wireless' earnings report. The company's loss for the fourth quarter of 2003 was $84 million, or 3 cents per share, compared with a quarterly loss of $131 million, or 5 cents per share, a year earlier. AT&T Wireless reported fourth-quarter services revenue of $3.9 billion, up 4.4% from the fourth quarter of 2002.
Analysts surveyed by Thomson Financial/First Call had forecast a break-even fourth quarter for the company.
AT&T Wireless experienced a couple of problems in the fourth quarter related to customer care software glitches and number portability, Kagan wrote, but he called those problems "isolated incidents."
"The bright side is the worst should be over, and the company remains one of the strongest and well positioned, which is why they are the focus of so much merger attention," Kagan said.
Reprinted with permission from
Story copyright 2009 International Data Group. All rights reserved.
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