Excerpt: “AT&T to buy TCI for $48 billion.”
- In a conference call this morning, [Michael] Armstrong said the two companies worked late into the night to work out all the details of the pact. TCI chief executive John Malone noted that the definitive agreement was put together in eight days.
- The deal’s hefty $48 billion price tag includes $32 billion in stock and $16 billion in assumed debt. The deal calls for AT&T to issue 0.7757 shares of common stock for each share of TCI Group Series A stock and 0.8533 shares of AT&T for each share of TCI Group Series B stock.
- AT&T president John Zeglis will become chief executive of AT&T Consumer Services, and TCI president Leo Hindery will be the new unit’s president and chief operating officer. Malone will step down as TCI’s CEO, but will become a member of AT&T’s board.
- TCI recently has rebounded under chief executive Malone and newly installed president Hindery. It has cut costs, concentrated its operations in select markets, and even taken strides to marry new television and Internet programming with its extensive distribution network.
- This is not the first time that TCI has teamed up with a telco. In 1983, TCI agreed to be acquired by Bell Atlantic for $16.7 billion, but the deal later unraveled because of philosophical differences.
- Under Malone, TCI has helped reshape the cable industry. The company’s own roots date back to the 1950s, when founder Bob Magness, an Oklahoma cottonseed salesman, launched the business to bring decent television reception to the rural Midwest.