AT&T announced Friday it has revised a deal with cablers Comcast and Cox to rejigger the ownership of Internet company ExciteAtHome.
In March 2000, the two cable companies exercised a put option to sell their stakes in ExciteAtHome to AT&T for $48 a share in a tax free exchange for them. They could chose to be paid either in cash or the equivalent AT&T stock. The partners opted for stock, and AT&T was prepared to issue about 134 million shares in exchange for 60.4 million shares of ExciteAtHome.
Change in plans
Now, however, AT&T has told the cablers to keep their stakes in troubled ExciteAtHome. But under the new agreement, which AT&T said will bring it a substantial tax benefit, it will issue shares to both companies in any case. The telecom giant has already issued 75 million shares to Cox and will hand over more than 80 million shares to Comcast by June. It issued more shares than originally planned to compensate the cable companies for the taxes they must pay on the AT&T stock.
AT&T said the transactions are not expected to significantly affect its net income or earnings per share and won’t change the previously announced second-quarter earnings guidance provided to investors.
AT&T shares closed Friday at $22.10. Shares of ExciteAtHome closed at $3.94.