The disposal is not unexpected as BT had made it clear it was not a long-term investor in AT&T. However, some City analysts had originally expected BT to make several hundred million pounds on the deal.
A spokesman for BT said: "It's going to wash its face post-tax and prior to expenses." The expenses are likely to amount to about £13m.
Under the terms struck by AT&T and BT, executives from the US giant will conduct a roadshow to help facilitate the sale. AT&T will also make shares available to cover over-allotments in the event of high demand. The BT spokesman said that the co-operation of AT&T, was a key factor in BT agreeing to swap McCaw for AT&T paper. He added: "AT&T's interests are best served in having a successful offer."
Goldman Sachs and Morgan Stanley have been appointed joint global co-ordinators and lead managers on the offering.
The allocations and the final offer price will be decided by a process of book-building similar to that used by the Government in privatisation offers.
The proceeds will benefit BT in the year to 31 March 1996 through enhanced interest payments.Reuse content