AT&T( AT&T Corp ) seen as possible BBN Corp suitor--arbs
NEW YORK, May 6 (Reuter) - GTE Corp shares slumped on speculation it could have to raise its $616 million bid for BBN Corp to fend off another bidder, arbitragers said.
GTE said Tuesday it would pay $29 per share for BBN. Yet Wall Street believes another suitor for the Internet-service provider, possibly AT&T Corp, has been circling BBN and could force GTE to sharpen its $29 per share offer.
An AT&T spokesman declined comment on the rumors. BBN also said it had no comment.
"I think the odds are in the 10 to 20 percent range someone else comes in, and if this happens it is going to be Telephone," said an arbitrageur.
"I wonder what AT&T is saying?" a second arb asked, who said BBN's share price of 29, up 6-3/8, indicates the market is anticipating a sweeter buyout while GTE's 4-5/8 decline to 42-7/8 is reflecting market wariness about the BBN purchase price turning potentially burdensome.
"But if I were AT&T, I would look long and hard (at BBN) after seeing GTE (shares) go down 10 percent. People are recognizing GTE is trying to make a strategic shift in their business," the first arb said.
AT&T shares were off 5/8 to 33-1/4.
The speculation of an AT&T acquisition has been pervading the market for almost two weeks, a period during which BBN shares rallied from about $16 per share to approximately $23, arbs and traders said.
Along with the ascent, BBN's trading volume was unusually heavy. |
