AT&T to Acquire Cable Giant Tele-Commuications Inc.
ALEXANDRIA, VA (June 24, 1998) /FOOLWIRE/ -- Cable TV operator Tele-Communications Inc. (Nasdaq: TCOMA) jumped $3 1/516 to $42 5/8 this morning on news that it will be acquired by telecommunications powerhouse AT&T (NYSE: T) in a stock-swap valued at around $48 billion. AT&T will issue 0.7757 of its shares for each TCI Group Series A share and 0.8533 shares for each TCI Group Series B share.
Ma Bell will join its current consumer long-distance, wireless, and Internet services units with TCI's cable, telecommunications, and high-speed Internet businesses to form a new subsidiary, AT&T Consumer Services, which will trade as a "tracking stock" on the New York Stock Exchange. AT&T also plans to issue separate tracking stock to holders of TCI's programming arm, Liberty Media Group (Nasdaq: LBTYA and LBTYB).
In addition, AT&T announced that its second-quarter earnings will beat analysts' expectations of $0.80 to $0.82 a share by $0.08 to $0.10 thanks to earlier-than-expected benefits from its ongoing cost-cutting measures. Taking into account the merger with TCI, the company anticipates 1998 EPS of $3.35 to $3.45.