Alls I can say is "Holy Cow Batman, Where is the money coming from???"
Doesn't it make you wonder which one of your stocks this $10 billion is going to come out of?
(REUTERS) Update 2-AT&T sets wireless IPO terms, sees $10 bln net
Update 2-AT&T sets wireless IPO terms, sees $10 bln net
(Adds quote in 3rd para, share distribution in paras 9-10)
By Jeremy Pelofsky
WASHINGTON, March 28 (Reuters) - AT&T Corp. <T.N>, the No.
1 U.S. long-distance telephone company, said on Tuesday it
planned to sell 360 million shares of a tracking stock to
represent its wireless voice and data operations, setting an
estimated price range of $26-$32 a share for the IPO.
The issue would represent the largest initial public stock
offering, or IPO, in U.S. history, netting AT&T $10.13 billion
based on the terms detailed in an amended prospectus filed with
the Securities and Exchange Commission.
"Although it's inordinately large in shares and total
dollars raised, it's about a national deployment of technology.
... It will be sought after by all the institutions," said
David Menlow, president of IPOFinancial.com.
The terms of the deal, which AT&T first announced in
December, were revealed in the SEC filing on Tuesday.
The company will allocate the first $7 billion in proceeds
to the wireless operation, using the funds for expanding its
network, pursuing acquisitions as they arise, capital spending
and general corporate purposes, the filing said. The remaining
proceeds will go toward general corporate purposes at the AT&T
common stock group.
With about 12.2 million customers at the end of last year,
AT&T Wireless generated about $7.6 billion in revenue in 1999,
the prospectus said. By the end of this year, AT&T Wireless is
expected to have a network that will cover more than 70 percent
of the U.S. population, including partnership and affiliate
markets.
The tracking stock will represent AT&T's mobile and fixed
wireless licenses, all of its wireless networks, operations,
cellular sites, retail operations, wireless customer-care
facilities, and interests in partnerships and affiliates in the
United States and overseas.
The issue will represent a 15.6 percent of AT&T's economic
interest in the wireless group.
After the offering, there will be about 2.31 billion shares
outstanding in AT&T Wireless, giving it an initial market
capitalization of about $67 billion based on a $29 per share
initial price, the midpoint of the estimated range.
After the IPO, AT&T said it would dispose of its remaining
economic interest, the equivalent of 1.95 billion shares, via a
stock dividend and possibly either an exchange offer, a further
sale of shares in the tracking stock, or both.
John Zeglis, 52, was named chief executive of the wireless
operation in 1999 after serving as president and a director of
AT&T since 1997. He formerly was a partner at the Sidley &
Austin law firm.
Earlier this month, the president of the wireless unit, Dan
Hesse, quit AT&T to become the chief executive and president of
TeraBeam Networks Inc. The Seattle-based Internet start-up is
developing a wireless data technology that uses laser beams for
the high-speed transmission of large chunks of data.
AT&T plans to offer 306 million shares of the tracking
stock in the United States and Canada while offering the
remaining 54 million shares in other countries. It plans to
list the tracking stock on the New York Stock Exchange under
the symbol "AWE." <AWE.N>
Goldman, Sachs & Co., Merrill Lynch & Co. and Salomon Smith
Barney are the global coordinators and joint book-running
managers for the IPO. The underwriters have been granted the
option to purchase an additional 54 million shares to cover
over-allotments to meet potential heavy demand.
The issuing of the tracking stock by AT&T follows Sprint
Corp.'s <FON.N> own tracker "PCS," <PCS.N> created in 1998 to
represent its own wireless operations.
AT&T already has one tracking stock, Liberty Media Group
<LMGa.N>, which represents its television programming assets.
Shares in AT&T closed down 1-7/16 to 58-15/16 on the New
York Stock Exchange.
((Reuters SEC Desk, 202-898-8399))
REUTERS
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