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AT&T seeks shareholder OK for reverse stock split
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PHILADELPHIA, April 10 (Reuters) - AT&T Corp. (NYSE:T - news) said on Wednesday it will seek shareholder approval for a one-for-five reverse stock split in a move to beef up its stock once it sells its cable television business to Comcast Corp.
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According to a filing with the Securities and Exchange Commission, AT&T also will seek approval for its plan to sell its AT&T Broadband cable television unit to Comcast Corp. (NasdaqNM:CMCSA - news), and to create a tracking stock that will reflect the performance of its consumer services unit.
The date for the shareholder meeting has not been set.
The reverse stock split will not give AT&T shareholders more value for their holdings. It is the same as getting one $50 bill for five $10 bills.
Since the dot-com bust, several small companies have used reverse stock splits to bulk up their inexpensive stock prices to meet listing requirements for the New York Stock Exchange or Nasdaq.
In AT&T's case, it would set the reverse split as it sells its cable business to Comcast. That would boost the the price tag on its remaining stock, making it trade more in line with its peers.
Under the agreement with Comcast, the AT&T Broadband unit is valued at about $10. Based on AT&T's current stock price of $14.50, that means its core long-distance telephone operations are valued at about $4.50.
The reverse stock split would reduce the number of shares outstanding and value the core telephone business at about $22.50 a share, based on today's prices.
The New York-based company also announced the election of Frank Herringer, chairman of Transamerica Corp., and Tony White, chairman of Applera Corp., to its board of directors. |
