New York -- AT&T Corp.'s board of directors
authorized a buyback of up to $3 billion in common stock in an effort to reduce the
dilution from its $48 billion merger with Tele-Communications Inc.
AT&T's stock, which was trading at about $60 when
the deal was announced in late June, plunged to below $55 soon afterward, leading some to
believe that AT&T stockholders might kill the deal.
But the stock has rallied in recent weeks, as AT&T
chairman C. Michael Armstrong and TCI chairman and CEO John Malone have sought to reassure
shareholders. AT&T shares stood at $59.06 as of midday last Friday on the New York
AT&T's second quarter held mixed results. While
profits grew by 20 percent from a year ago, sales grew by only 1 percent. The company
earned $1.15 billion, or 71 cents per share on a diluted basis, versus a $959 million, or
59 cents per diluted share, a year ago. Excluding one-time charges related to early
retirement incentives, profits would have risen by 60 percent.
AT&T said it intends to repurchase shares periodically
prior to the closing of the TCI merger through an open-market share-repurchase program,
and to reissue the repurchased shares as part of the shares to be issued in connection
with the TCI merger.