AT&T Corp. is reported to be in “exploratory discussions” with Dobson Communications Corp. regarding a potential transaction between the two companies, according to a report in the Wall Street Journal.
The report cites an AT&T filing with the Securities and Exchange Commission.
“As part of this ongoing review, (AT&T) has engaged, and may in the future engage, legal and financial advisers to assist in such review and in evaluating strategic alternatives that are or may become available with respect to their holdings in (Dobson),” AT&T said in its filing.
AT&T currently owns 12.3 million shares, or 32 percent, of Dobson’s Class A common stock. AT&T Wireless recently purchased 200,000 shares of Dobson’s Series AA Preferred Stock for $200 million earlier this month.
AT&T said it had no comment on the report, noting the information in the filing was routine information the company had to include.
AT&T Wireless and Dobson have an agreement giving AT&T Wireless a limited right of first offer for certain licenses Dobson may acquire.
The Wall Street Journal also reported AT&T was in talks with British Telecommunications plc about the future of their Concert joint venture.
AT&T Chief Executive Officer Michael Armstrong told analysts during the company’s fourth-quarter earnings report that Concert’s profitability was less than expected and that AT&T was “working with BT to evaluate what we can do to improve and strengthen our relationship.”
Concert was formed in 1998 by the telecom giants to offer services to their large corporate customers, but has failed to hit sales targets in Europe.
BT also reported last week it may abandon its plan for an initial public offering of its wireless unit, and instead spin off the unit to its existing shareholders.
The news came on the heels of France Telecom’s disappointing IPO of its Orange plc wireless unit, and a warning by Standard & Poor’s that BT was being reviewed for a possible credit rating downgrade from its current A rating.
“We’ve gone back to BT and said the original plan doesn’t hold up in light of how far asset prices have fallen,” Duncan Warwick-Champion, credit analyst with S&P, told the New York Times.
The initial asking price for Orange’s IPO was reduced twice and eventually raised less than half as much France Telecom had originally expected. S&P downgraded France Telecom’s credit rating to A-.
