Shareholders Okay Measure To Facilitate AT&T Split


AT&T shareholders at the company's annual meeting last week in Cincinnati approved a measure that will make it easier to split the company into four parts.

About 96 percent of shareholders agreed to amend AT&T's charter, lowering from two-thirds to a simple majority the vote required for shareowners to authorize any merger, consolidation, or dissolution of AT&T.

The amendment was especially important since AT&T plans to split into a quartet of separate units — Business Services, Consumer Services, Wireless and Broadband — later this year.

Some shareholders groups were against the amendment — particularly the Communications Workers of America, which represents about 33,000 AT&T workers. Although the CWA sued AT&T in March to block the charter amendment, the union later dropped the suit after AT&T agreed to improve union access to jobs after its proposed restructuring.

Chairman C. Michael Armstrong used the bulk of his opening statements to reassure shareholders about the planned restructuring.

Earlier, AT&T had announced plans to spin off its Liberty Media Group tracking stock as an asset-based company later this year.

AT&T also wants to spin off its Wireless Group tracking stock as a standalone company this summer, which will be distributed to shareholders as a dividend. In the fourth quarter, the company intends to position its Consumer Services unit as a tracking stock to shareholders. Around the same time, an initial public offering for a tracking stock for its Broadband unit is expected to commence. In 2002, the Broadband unit is expected to become a separate asset-based stock.

After a brief overview of the four separate businesses, Armstrong told the audience that as a benefit of the breakup, AT&T shareholders would receive stock in four separate companies — each poised for growth.

"By the end of this year, you as a shareholder should have your AT&T stock; wireless stock that we will dividend to you; the consumer tracking stock that we would dividend 100-percent economic interest to you and there would be the public offering opportunity of our Broadband," he said. "Later in 2002, we will then be separating the Broadband company and dividending to you the remaining shares of the Broadband stock as well. So you will end up with three asset stocks and four company stocks that we will have distributed to our shareholders."