BT sells $1.7bn stake in telecommunications giant

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The Independent Online
BT is to sell its $1.7bn stake in AT&T, the world's largest telecommunications company, through an international offer that could take place at the end of this month. The sale will result in little or no profit for BT. It acquired the shares last year inexchange for its 17 per cent stake in McCaw Cellular, which cost the company $1.5bn, writes Mary Fagan.

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.