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Behind the Deal: The AT&T breakup

May 21, 2001  •  Post A Comment

Here are the particulars of AT&T Corp.’s planned breakup as detailed in a recent Securities and Exchange Commission filing, which call for deals aimed at reducing its $47.5 billion debt:
* Credit Suisse First Boston will shop AT&T’s 25.5 percent stake in Time Warner Entertainment, valued between $10 billion and $14 billion. Prospective suitors include Liberty Media Group, Comcast Corp. and AOL Time Warner (which controls TWE assets HBO, Warner Bros. and Time Warner cable systems).
* AT&T will sell its 30 million shares in Cablevision Systems, valued at $1.7 billion. Cablevision-a potential buyer along with AOL Time Warner and Liberty-is exercising its right to delay the sale for five months.
* The company will assign $28.4 billion of its debt to AT&T Broadband, which becomes a tracking stock later this year before a complete spinoff in 2002. Offsets of $61 million in cash and $2.2 billion in short-term investments still leave broadband groaning under an exorbitant 16.6 times cash flow ratio that requires more asset sales.