AT&T and TCI to Merge
AT&T to Create Separately Traded Unit to Provide Consumer
Communications and
Entertainment Services; AT&T's Second Quarter Earnings to
Exceed Estimates
NEW YORK, June 24 /PRNewswire/ -- AT&T announced today that
it has signed
a definitive merger agreement with Tele-Communications, Inc.
(TCI) for an all-stock transaction valued at approximately $48
billion. Under the agreement, AT&T will issue 0.7757 shares of
AT&T common stock for each share of TCI Group Series A stock and
0.8533 shares of AT&T for each share of TCI Group Series B stock.
Immediately following the merger, AT&T will combine its
current consumer
long distance, wireless and Internet services units with TCI's
cable, telecommunications, and high-speed Internet businesses to
create a new subsidiary -- AT&T Consumer Services. The company
will trade as a "letter" or "tracking stock" on the New York
Stock Exchange and have a significant public ownership. AT&T
will also issue separate tracking stock to holders of TCI's
programming arm, Liberty Media Group, to continue the holders'
interests in the assets now represented by those shares.
Separately, AT&T announced that its second quarter earnings
would exceed
analyst estimates of 80 cents to 82 cents per share by 8 cents
to 10 cents due to earlier and better than expected benefits from
its on-going cost reduction efforts. The company anticipates
1998 earnings of $3.35 to $3.45 per share, adjusted for the
effects of the company's pending merger with TCG.
AT&T Consumer Services
AT&T Consumer Services will provide the broadest set of
consumer
communications services -- including local, long distance,
wireless and international communications, cable television,
dial-up and high-speed Internet access services -- all under the
AT&T brand name.
AT&T Consumer Services will own and operate the nation's most
extensive,
broadband local network platform. Following the merger, the new
unit intends to significantly accelerate the upgrading of its
cable infrastructure, enabling it to begin providing digital
telephony and data services to consumers by the end of 1999, in
addition to digital video services.
"Today we are beginning to answer a big part of the question
about how we
will provide local service to U.S. consumers," said C. Michael
Armstrong, chairman and CEO of AT&T.
"We are merging with TCI not only for what it is but for what
we can
become together," Armstrong explained. "Through its own systems
and in partnership with affiliates, AT&T Consumer Services will
bring to people's homes the first fully integrated package of
communications, electronic commerce and video entertainment
services. And it will do it with the quality and reliability
that people have come to expect from AT&T."
"This merger is a tremendous growth opportunity for TCI's
shareowners and
employees," said John C. Malone, chairman and CEO of TCI. "As
TCI continues the large-scale deployment of advanced digital
set-top devices, AT&T's extraordinary brand and resources are
ideal complements to TCI's broadband cable distribution and
operations. AT&T Consumer Services will offer consumers a wide
variety of entertainment, information and communications
products, which thoughtfully address personal tastes, needs,
choice and convenience."
John D. Zeglis, currently president of AT&T, will be chairman
and CEO of
AT&T Consumer Services and will remain on the AT&T Board of
Directors. Leo J. Hindery, Jr., currently president of TCI, will
be the new unit's president and chief operating officer. Malone
has agreed to become a member of the AT&T Board of Directors.
AT&T Consumer Services will provide its services to consumers
through a
combination of its own broadband networks and services it will
procure from others, including AT&T. The new unit will include
all of the cable television systems AT&T is acquiring in the
merger with TCI, as well as AT&T's fixed wireless technology and
related spectrum rights covering more than 90 percent of the
nation. When the merger and pending TCI cable system
transactions are complete, AT&T Consumer Services' wholly owned
and affiliated cable systems will pass 33 million homes.
In addition to these physical assets, AT&T Consumer Services
will also
include all elements of AT&T's existing consumer businesses,
except network operations that it will procure from its parent.
AT&T's consumer businesses include the nation's leading long
distance services, with annual revenues of approximately $23
billion, and the most broadly available wireless services, with
annual revenues greater than $3 billion.
AT&T's consumer businesses include WorldNet, one of the
industry's leading
dial-up Internet access services. Through the acquisition of
TCI, AT&T Consumer Services will also hold a controlling interest
in the @Home Network, the leading provider of high-speed Internet
access and content services. @Home currently has affiliate
agreements with TCI and several major cable companies that
collectively pass more than 50 million homes.
On a pro forma basis, before considering synergies, the
company projects
that AT&T Consumer Services could have 1999 revenue of
approximately $33 billion and earnings before interest, taxes,
depreciation and amortization (EBITDA) of approximately $7
billion to $7.5 billion. AT&T and TCI anticipate their merger
will result in increased revenue and lower costs, producing
synergies of approximately $2 billion per year beginning three
years after the merger closes. For example, the merger is
expected to improve TCI's cable service penetration and improve
customer retention for AT&T's consumer long distance service. It
will also help reduce the charges AT&T pays to local telephone
companies to handle long distance calls and allow both companies
to reduce their respective customer care, billing and advertising
expenses.
Business Communications and Wholesale Networking Services
AT&T itself will remain the world leader in business
communications
services and become the leader in wholesale networking services.
On a pro forma basis, the company projects its 1999 revenues from
those businesses could exceed $29 billion and its EBITDA could
reach approximately $12 billion. AT&T will continue to provide
global communications, outsourcing and systems integration
services to more than 15 million businesses and institutions. It
will own and operate the world's most extensive and advanced
communications network, the nation's largest wireless
infrastructure, and, following the pending acquisition of TCG, a
local access network reaching more than 250 cities from coast to
coast.
"AT&T is now better positioned for growth," said Armstrong.
"When this
transaction is completed, AT&T will be the undisputed leader in
three of the fastest growing segments of the communications
services industry - consumer, business and wholesale networking
services."
Neither AT&T nor TCI anticipates any significant downsizing
to result from
the merger. Most AT&T and TCI employees will follow their jobs,
and both companies have established senior management teams to
ensure a smooth transition. In fact, both companies expect the
merger and the creation of AT&T Consumer Services to accelerate
their growth, significantly enhancing career opportunities for
all employees involved.
AT&T and TCI said that they expect the merger, which is
contingent on
regulatory and other approvals, to be tax-free to their
respective shareholders and to close in the first half of 1999.
The foregoing are forward looking statements within the
meaning of the
Securities Act, including statements concerning future operating
performance, AT&T's share of new and existing markets, and AT&T's
revenue and earnings growth rates. Such forward looking
statements, which are not a guarantee of performance, are subject
to a number of uncertainties and other factors, that could cause
actual results to differ materially from such statements,
including the ability to realize potential synergies and
integrate operations; competitive pressures, including the timing
and level of RBOC entry into long distance; and the success and
market acceptance of new products and services. For a more
detailed description of the factors that could cause such a
difference, please see AT&T's filings with the Securities and
Exchange Commission. AT&T disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
CONTACT: Adele Ambrose, 908-221-6900, or pager,
888-602-5420, or Eileen
Connolly, 908-221-6731, or pager, 888-602-5417, both of AT&T; or
LaRae Marsik, 303-267-5277, or pager, 888-788-1282, or Katina
Vlahadamis, 303-267-5659, or pager, 800-209-5011, both of TCI.
Liberty Media Group to Combine With TCI Ventures
Group
New Entity Headed by John Malone to be Separately Traded
Tracking Stock
Of AT&T Upon Closing of AT&T/TCI Merger
NEW YORK, and ENGLEWOOD, Colo., June 24 /PRNewswire/ --
Tele-Communications, Inc. announced its intention to combine
Liberty Media Group (Nasdaq: LBYTA), its programming arm, and TCI
Ventures Group (Nasdaq: TCIVA), its technology investments unit.
The proposed combination is concurrent with, but not conditional
upon, today's announcement of the signing of a merger agreement
between Tele-Communications, Inc. (TCI) and AT&T (NYSE: T).
Under the terms of the consolidation, which is subject to
shareholder approval, each outstanding share of TCIVA or TCIVB
stock will be exchanged for .52 shares of LBTYA or LBTYB, as the
case may be. John C. Malone, TCI's Chairman and Chief Executive
Officer, will serve as Chairman of the consolidated group, which
will be called Liberty Media Group, and Robert R. Bennett,
President and CEO of Liberty, will be President and CEO of the
new entity.
Upon closing of the AT&T/TCI merger, the shareholders of the
new Liberty
Media Group will be issued separate tracking stock by AT&T in
exchange for the shares currently held. In addition, prior to
the closing, Liberty's investment in At Home Corporation (Nasdaq:
ATHM), its investment in the National Digital Television Center,
and its ownership of Western Tele-Communications, Inc. will be
acquired by TCI Group for $2.5 billion cash in a tax-free
transaction. The AT&T shares which TCI Ventures Group will
acquire upon closing of the Teleport (Nasdaq: TCGI) transaction
will also be acquired by TCI Group for approximately $3.0 billion
cash in a tax-free transaction. The new AT&T tracking stock will
track the remaining assets of the current Liberty and Ventures
Groups together with the approximately $5.5 billion of cash
proceeds from the foregoing transactions. Liberty will inherit
TCI's net operating loss carryforward existing at the closing of
the AT&T/TCI merger; such carryforward is currently approximately
$1.7 billion and is subject to change prior to such closing.
"The new Liberty Media Group's exceptional programming and
technology
investments, plus the substantial cash it will have, will help
grow new businesses, develop content and realize solid asset
values for the benefit of the stockholders of Liberty Media
Group," said Mr. Malone. "I am very pleased to work closely with
Dob Bennett and to focus my attention on the wealth of
opportunities which exist."
Tele-Communications, Inc. is traded through the TCI Group,
TCI Ventures
Group, and Liberty Media Group common stocks. The Series A and
Series B TCI Ventures Group common stocks are traded on the
National Market tier of the Nasdaq Stock Market under the symbols
TCIVA and TCIVB, respectively.
Liberty Media Group Series A and Series B Common Stock are
series of
Tele-Communications, Inc. Common Stock and are traded on the
National Market tier of The Nasdaq Stock Market under symbols
LBTYA and LBTYB, respectively. Liberty Media Corporation operates
the assets that comprise the Liberty Media Group.
Certain of the information presented in this press release
constitutes
forward looking statements within the meaning of the Private
Securities Litigation Act of 1995. Although the Company believes
that its expectations are based on reasonable assumptions, there
can be no assurance that actual results will not differ
materially from the Company's expectations. For additional
information, please refer to the reports filed by the Company
with the Securities and Exchange Commission. The Company assumes
no obligation to update the information contained in this press
release.
CONTACT: Vivian Carr of Liberty Media Group, 303-721-5406;
or LaRae
Marsik, Media Relations, 303-267-5273, or Linda Dill, Investor
Relations, 303-267-5048, both of TCI.
MICHAEL ARMSTRONG
CHAIRMAN AND CHIEF EXECUTIVE OFFICER - AT&T
C. Michael Armstrong was elected chairman of the board and
CEO of AT&T
effective November 1, 1997.
At AT&T, he heads the world's leading communications services
company,
with more than 90 million customers, 130,000 employees and $52
billion in revenues.
Armstrong came to AT&T from Hughes Electronics, where he had
been chairman
and CEO for six years, transforming it from a company focused
mainly on defense to a powerful competitor in the commercial
electronics, space and telecommunications industries.
Prior to Hughes, Armstrong spent more than three decades with
IBM.
Beginning there as a systems engineer, he rose through the ranks
to become senior vice president and chairman of the board of IBM
World Trade Corporation. Earlier, he played major roles in IBM's
personal computer and telecommunications businesses.
Born October 18, 1938, in Detroit, Michigan, Armstrong earned
a B.S.
degree in business and economics from Miami University of Ohio in
1961, and completed the advanced management curriculum at
Dartmouth Institute in 1976. He was awarded an honorary Doctor of
Laws degree from Pepperdine University in 1997.
An active supporter of higher education, Armstrong is a
trustee of Johns
Hopkins University and a member of the advisory board of the Yale
School of Management.
Armstrong serves as chairman of the President's Export
Council, the
premier national advisory committee on international trade to
President Clinton and the Secretary of Commerce. He is also a
member of the Business Council, Council on Foreign Relations, the
National Security Telecommunications Advisory Committee and the
Defense Policy Advisory Committee on Trade.
Armstrong is a member of the board of directors of Travelers
Corporation,
and the supervisory board of the Thyssen-Bornemisza Group.
April 1998
Biography
John C. Malone
Dr. John C. Malone is Chairman and Chief Executive Officer of
Tele-Communications, Inc., (TCI), a position he has held since
1996. Previous to that, from 1973 to 1996, Dr. Malone served as
President and CEO of TCI. He is a Director of TCI and also
serves on the Board of Directors for the Bank of New York, the
CATO Institute, Discovery Communications, Inc., PRIMESTAR, Inc.
and BET Holdings, Inc. Additionally, Dr. Malone is Chairman of
the Board for Cable Television Laboratories, Inc., and
Tele-Communications International, Inc.
Born March 7, 1941, in Milford, Connecticut, Dr. Malone was a
Phi Beta
Kappa and merit scholar at Yale University where he obtained a
Bachelor of Science in Electrical Engineering and Economics in
1963. He also received a Master of Science in Industrial
Management from Johns Hopkins in 1964 and a Doctor of Philosophy
(Ph.D.) in Operations Research from Johns Hopkins in 1967.
Dr. Malone began his career in 1963 at Bell Telephone
Laboratories/AT&T in
economic planning and research and development. In 1968, he
joined McKinsey & Company and in 1970 he became Group Vice
President at General Instrument Corporation (GI). He was later
named President of Jerrold Electronics, a GI subsidiary.
He served as Director of the National Cable Television
Association (NCTA)
from 1974 to 1977 and again from 1980 to 1993. During the
1977-1978 term, Dr. Malone was the NCTA's Treasurer.
In 1983, Dr. Malone received the NCTA Vanguard Award, one of
the highest
honors in the cable television industry. He has received many
other awards and honors which include: TVC Magazine Man of the
Year Award - 1981; Wall Street Transcript's Gold Award for the
cable industry's best Chief Executive Officer - 1982, 1985, 1986
and 1987; Wall Street's Transcript Silver Award in 1984 and 1989;
Women In Cable's Betsy Magness Fellowship Honoree; University of
Pennsylvania Wharton School Sol C. Snider Entrepreneurial Center
Award of Merit for Distinguished Entrepreneurship; American
Jewish Committee Sherrill C. Corwin Human Relations Award; Denver
University Honorary Degree for Doctorate of Human Letters - 1992;
Communications Technology Magazine Service and Technology Award;
Bronze Award - 1993 Financial World CEO of the Year Competition;
and 1994 Hopkins Distinguished Alumnus Award.
JOHN D. ZEGLIS
PRESIDENT
John Zeglis is President of AT&T and the head of operations
for this
global communications company. Zeglis and Mike Armstrong, AT&T's
CEO, together constitute the company's Office of the Chairman,
which has overall responsibility for AT&T's strategy direction
and operations.
Zeglis grew up in Momence, Illinois. He spent his
undergraduate years at
the University of Illinois, and was a 1972 magna cum laude
graduate of Harvard Law School. He was a senior editor of the
Harvard Law Review and won a Knox Memorial Fellowship for a year
of postgraduate study in law and economics in Europe. He began
his career in law in 1973 as an associate with Sidley & Austin.
He became a partner in 1978, and on January 1, 1984, he joined
AT&T as corporate vice president and general attorney.
Zeglis was named AT&T's general counsel in 1986. While
retaining that
title he served in a series of executive assignments with
increasing responsibility before being elected vice chairman in
June 1997 and president in October 1997.
He is a member of the American Bar Association and state and
local bar
associations and professional groups, and is active in volunteer
groups supporting education. He is the chairman of the Board of
Trustees of the George Washington University, a trustee of the
Brookings Institution in Washington, D.C., and a trustee of the
Culver Education Foundation, Culver, Indiana. Zeglis is also a
member of the Kellogg Advisory Board of the J.L. Kellogg Graduate
School of Management at Northwestern University and a member of
the University of Illinois Business Advisory Council. He is a
director of the Helmerich and Payne Corporation in Tulsa,
Oklahoma, as well as the Illinova Corporation in Decatur,
Illinois.
Zeglis lives in New Jersey and is married to the former Carol
Jane Hamm.
They have three children.
January 1998
Biography
LEO J. HINDERY, JR.
Leo J. Hindery, Jr., 50, is the President, Chief Operating
Officer and a
Director of Tele-Communications, Inc. (TCI). Mr. Hindery was
elected President of TCI on March 1, 1997. TCI is the world's
largest multiple cable system operator, and it owns and has
interests in domestic and international programming, telephony
and data service businesses. Mr. Hindery is also Chairman of TCI
Communications, Inc. (TCIC), Liberty Media Group (LBTY) and TCI
Ventures Group (TCIV).
Prior to joining TCI, Mr. Hindery was Managing General
Partner and Chief
Executive Officer of InterMedia Partners and its related
entities, which he founded in 1988. InterMedia is the nation's
tenth largest multiple system operator.
Before launching InterMedia Partners, Mr. Hindery was Chief
Officer for
Planning and Finance of The Chronicle Publishing Company of San
Francisco, which owns substantial newspaper and television
broadcast properties and, at the time, owned significant cable
television properties. Prior to joining Chronicle, Mr. Hindery
was Chief Financial Officer and Managing Director of Becker
Paribas, Inc., a major New York-based investment banking firm.
His career began with Utah International Inc. in 1971, where he
became the company's senior financial officer, with
responsibility for financings, acquisitions and development.
Mr. Hindery graduated with honors from Stanford University's
Graduate
School of Business in 1971, where he earned a master of business
administration degree. He is a graduate with honors of Seattle
University.
Mr. Hindery is a Director of Tele-Communications, Inc. and of
@Home
Network, Cablevision, Inc., Lenfest Group, TCI Music, Inc., Tele-
Communications International, Inc., and USA Networks, Inc.;
Chairman, a Director and member of the Executive Committee of the
National Cable Television Association (NCTA); Chairman and a
Director of C-SPAN; and a member of the Executive Committee of
Cable in the Classroom. He is also an honorary chair of Cable
Positive, the cable industry's AIDS awareness organization, and a
member of the Stanford Business School Advisory Council.
SOURCE AT&T and Tele-Communications, Inc.
CONTACT: For "AT&T and TCI to Merge" - Adele Ambrose,
908-221-6900, or pager, 888-602-5420, or Eileen Connolly,
908-221-6731, or pager, 888-602-5417, both of AT&T; or LaRae
Marsik, 303-267-5277, or pager, 888-788-1282, or Katina
Vlahadamis, 303-267-5659, or pager, 800-209-5011, both of TCI.
For "Liberty Media Group to Combine With TCI Ventures Group"
- Vivian Carr
of Liberty Media Group, 303-721-5406; or LaRae Marsik, Media
Relations, 303-267-5273, or Linda Dill, Investor Relations,
303-267-5048, both of TCI/
(T LBYTA TCIVA ATHM TCGI) |
