Word: dealing
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Dates: during 1990-1999
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Armstrong's vision of the new AT&T is simple enough: hooking up AT&T and TCI (1997 revenues: $7.6 billion) "will enable us to offer a full portfolio of services with one connection from one company. And this is a big deal." So big, in fact, that there was a hint of desperation about the merger, which sped to a conclusion after just eight days of talks in the Manhattan offices of Wachtell, Lipton, AT&T's legal counsel. "Time was closing in on us," says Armstrong, who at 59 remains a man in a hurry who relaxes...
News of the deal rang bells from Wall Street to Main Street to Pennsylvania Avenue. Investors drove up the price of cable- company stocks on the hope that more buyouts would follow. But Wall Street was less than gaga about AT&T, whose stock closed Friday at $56.75, down a whopping $8.625--or 13.1%--since Armstrong unveiled the deal. "Wall Street is missing the point," says Stuart Conrad, the head of telecommunications research for Deutsche Bank Securities. "This is one of the best things that AT&T could have done...
...drubbing was partly a response to the complexity of the deal, which calls for AT&T to bundle its consumer operations and TCI's cable systems into a new subsidiary, called AT&T Consumer Services that John Zeglis, who now serves as AT&T president, will run as chairman and CEO. The unit will issue a separate "tracking stock" that will let investors place bets on the consumer-related businesses of the new AT&T. A similar tracking stock already exists for Liberty Media, TCI's cable-programming arm, whose holdings include the Discovery Channel and Black Entertainment Television. Malone...
However Wall Street may have viewed the deal, some regulators saw it as a welcome spur to local competition--even as the Baby Bells howled. William E. Kennard, chairman of the FCC, says the merger looks "eminently thinkable." That hardly heartened US West and Bell Atlantic--which last year gobbled up neighboring NYNEX--which demanded access to long-distance markets should the deal go through. So far, Washington has barred the Bells from offering long-distance service to their own local customers on ground that they have not yet opened their "loops" to such rivals...
...their deal is approved, Malone and Armstrong hope the merger will be a kind of business Viagra for AT&T's famously languid corporate culture. The two say their merged companies could start phasing in these hot new services swiftly. About 25% of TCI's systems will have the capacity to carry two-way traffic by the end of this year, with 95% scheduled to be ready by the end of 2000. At the same time, AT&T plans to spend some $400 per household to install the digital set-top boxes that will serve as portals to high-speed...