AT&T and Comcast Shareholders Approve $28 billion Cable Merger
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biz.yahoo.com
Wednesday July 10, 1:03 pm Eastern Time
AT&T and Comcast Shareholders Approve Cable Merger
Shareholders of AT&T Corp. (NYSE: T - News) and Comcast (NasdaqNM: CMCSK - News) Corp. approved the merger of the companies' cable businesses, while the phone giant's shareholders also signed off on a plan to create a tracking stock for AT&T's consumer-long- distance business and hold a one-for-five reverse stock split.
AT&T said 69% of its 3.5 billion shares outstanding were voted in favor of the merger, while only 2% were against the proposal. Comcast 's vote was a formality, as President Brian L. Roberts controls nearly 87% of the company's voting power.
The deal, which would merge the nation's No. 1 and 3 cable companies in a deal valued at $28.1 billion in stock, is slated to close in the fourth quarter. AT&T Comcast will have 22 million subscribers in 41 states and a major presence in most of the top U.S. metropolitan markets.
Mr. Roberts will become president and chief executive of AT&T Comcast and his family will control one-third of the voting interests in the cable and high- speed Internet company. Current AT&T Chairman and CEO C. Michael Armstrong will be chairman of AT&T Comcast until 2005, when Mr. Roberts will take that post.
Despite shareholder approval of the tracking stock for AT&T's consumer- services business, Mr. Armstrong told reporters before the company's annual meeting in Charleston, S.C. , there is a possibility the plan will be scrapped. Such a scenario is allowed under the proxy to approve the tracking stock. Nonetheless, the company still plans to issue the stock, although timing depends on the market.
The tracking-stock vote was 61% of AT&T's outstanding shares in favor and 10% against. The reverse stock split was approved by an 80%-5% margin.
AT&T announced in April it was proposing a reverse split. Such a move would boost the company's stock price once its cable businesses are no longer part of AT&T. When AT&T Comcast 's stock is issued, AT&T's share price will be adjusted downward as a result.
At 4 p.m. EDT on the New York Stock Exchange, AT&T's stock was down 23 cents at $9.78, a far cry from the $60 price it traded at in late 1999.
-Kevin Kingsbury; Dow Jones Newswires; 609-520-4367
(Dinah Wisenberg Brin and Christine Nuzum of Dow Jones Newswires contributed to this report.) |
