Significant news for Nortel investors. SBC, Ameritech jump on upgrades. BCE also rises. The street is becoming aware the
SBC/Ameritech merger will be approved and the new company will be a full service telecom provider, not just a local baby
Bell. Then, the street will become aware that the equipment provider for this new powerhouse is Nortel.
Ken
cbs.marketwatch.com
SBC, Ameritech jump on upgrades
By Jeffry Bartash, CBS MarketWatch
Last Update: 5:12 PM ET Apr 1, 1999
Media Report NewsWatch Telecom Report
NEW YORK (CBS.MW) -- Shares of SBC Communications and
Ameritech rang higher Thursday after several brokerages upgraded the local Bell phone companies.
Saying SBC's pending acquisition of Ameritech
will create a behemoth telecom-service provider,
Lehman Brothers and J.P. Morgan upgraded SBC
to "buy." Lehman also raised its rating on
Ameritech to "buy" from "outperform."
Those blessings drove up shares of both
companies. SBC (SBC) rose 2 9/16 to 49 3/4,
while Ameritech (AIT) climbed 2 5/8 to 60 1/4.
Also rising: BCE Inc. (BCE), the biggest telecom
provider in Canada and owner of Bell Canada.
Last week, Ameritech agreed to take a 20 percent
stake in Bell Canada for $3.4 billion. Its stock gained 1 3/8 to 45 11/16.
Earlier this week, another brokerage, Edward Jones in St. Louis, boosted its rating on SBC to "strong buy" from "buy."
In a note to clients, analyst Mel Marten said: "The combined company will have its phone lines connecting one-third of the country's homes with a dominant position in the Midwest and Southwest.
"Over the next several years, we see SBC transforming from a local Baby Bell to a national, full-service telecom provider," he said. "SBC's great track record of rising earnings and dividends have provided investors with high returns over the past few years. We expect above average earnings and dividend growth to continue."
Jeffry Bartash is an online reporter for CBS MarketWatch.
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