Clock Still Ticking in AT&T/BellSouth Merger Approval Decision

Includes: BLS, T
by: Steven Towns

Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

Delays Raise Questions Over AT&T Deal [AP]

Summary: It looks like management at AT&T and BellSouth jumped the gun when they twice moved up the date for their merger to close. Since the deal was announced in March, the FCC has delayed a decision on three occasions and it is uncertain both if, and when, the FCC will approve it. Of concern is the mutual deadline of March for closing the deal. There is an option to extend until Sept 6, and either party can withdraw prior to, but would have to pay a hefty $1.7b termination fee. Today is the 208th day since the FCC issued a public notice, or the same amount of time it took to decide on the Cingular purchase of AT&T Wireless. It is unknown whether the FCC will make a decision at its next meeting on Dec 14, but it could vote earlier electronically. BLS-ATT-1yr-chart-111306 A BellSouth spokesman commented, "The deal is going to get done, it's just taking longer than we had thought. We just have to work through the political process, and that's what it is right now."
Related links: AT&T-BellSouth Merger Still Needs FCC ClearanceAT&T/ BellSouth Merger: Is Ma Bell Calling Back Her Babies?AT&T Reports 74% Profit Surge But Faces Delays in Its High End Cable RolloutCiti: Buy AT&T and Sell Verizon • Earnings conference call transcripts: AT&T Q3 2006 and Bell South Q3 2006
Potentially impacted stocks and ETFs: AT&T (NYSE:T) and BellSouth (BLS) • Competitors: Verizon (NYSE:VZ), Sprint Nextel (NYSE:S), Qwest Communications (NYSE:Q) and Comcast (NASDAQ:CMCSA) • ETFs: iShares S&P Global Telecommunications (NYSEARCA:IXP), iShares Dow Jones US Telecom (NYSEARCA:IYZ), Technology Select Sector SPDR (NYSEARCA:XLK), Telecom HOLDRs (NYSEARCA:TTH) and Vanguard Telecom Services (NYSEARCA:VOX).

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