AT&T Expecting $2.25 Billion Equity Sale

Communications Today, June 3, 2002

In an effort to buy the remaining 69 percent of AT&T Canada shares, AT&T [T] Friday said it plans an equity offering this week to raise about $2.25 billion. The company said investment firms Credit Suisse First Boston [CSR], Goldman Sachs [GS], J.P. Morgan [JPM] and Salomon Smith Barney [C] will underwrite the stock offering.

Under a deal struck between the two companies in 1999, AT&T has until June 2003 to purchase the publicly owned shares of AT&T Canada--the 69 percent stake--but only if Canada eases its foreign-ownership restrictions. If the rules are not relaxed, then AT&T would have to find a third party or a trust to hold the stake. If that doesn't happen, then AT&T Canada would be put up for auction and AT&T would have to pay shareholders any difference in price between the amount raised through the auction and the amount it has agreed to pay for the 69 percent stake.

This past month, AT&T Canada posted a first-quarter loss of C$157 million ($101 million), or C$1.57 ($1.01) a share, compared to a loss of C$167 million ($107.1 million), or C$1.73 a share ($1.11), a year ago.