[News] AT&T's FIRST BITE - Next Moves Could Be @Home, TCI Deals
MultiChannel News - VOLUME 19 • NUMBER 2 • JANUARY 12, 199
multichannel.com
This story was reported by Leslie Ellis, Joe Estrella and Kent Gibbons and written by Ellis.
AT&T Corp.'s $11.3 billion merger with Teleport Communications Group is likely to lead shortly to more major deals aimed at helping cable operators to accelerate network upgrades and to spawn local telephony services.
Tele-Communications Inc. president and chief operating officer Leo J. Hindery Jr. declined to comment on any further AT&T deals, saying, "This is just another pickle out of the jar."
But sources indicated last week that while the TCG deal is an hors d'oeurve, the main course could come in the form of an investment in @Home Network and a cash infusion into TCI to accelerate network upgrades and to spawn both IP (Internet protocol) and HFC (hybrid fiber-coaxial) telephony.
TCI, Comcast Corp. and Cox Communications Inc., which hold roughly 95 percent of TCG's voting power and 66 percent of its equity, approved the all-stock transaction last Thursday, as did AT&T's and TCG's boards of directors.
During a press teleconference last Thursday, AT&T and TCG executives repeatedly declined to discuss whether the TCG move will be followed by other deals to enter the residential telephone market via TCI.
TCG Facts
Route Miles 8,680
Major Metropolitan Markets 65
Initial Public Offering Price $16
Jan. 8 Closing Price $54.125
Fiber Miles 460,300
1996 Revenue $283.4 million
Source: Teleport Communications Group
In the merger, which is expected to close this fall after passing regulatory inspection, each share of TCG stock will be exchanged tax-free for 0.943 AT&T shares.
Sources close to the deal said AT&T has also negotiated a side agreement under which it will "infuse" revenues into TCI that the MSO will then use to upgrade its cable networks in major metropolitan areas. That deal has already been struck, and it is now in the hands of attorneys with both sides, sources said. |
