BellSouth's Bid for AT&T Fails . . . Again


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BellSouth's merger talks with AT&T have collapsed again. The Wall Street Journal reports that the Baby Bell called off the discussions because AT&T's $19 billion asking price was too high; the figure represents a 20 percent premium over AT&T's recent stock price.

The two telecom giants have been in marathon on-again/off-again merger talks for about three years. There are issues other than price, too, as regulatory hurdles would have to be addressed. BellSouth, based in Atlanta, but with a growing nationwide appetite, is said to be interested in AT&T's lucrative business accounts. On the down side, however, any acquirer of AT&T would have to deal with the company's eroding long-distance business.

Over the years, since the ordered breakup of the Bell System in 1984, AT&T has spun off several units. On the other hand, BellSouth has been somewhat shackled in its acquisition attempts. It made an unsuccessful attempt to acquire Sprint Corp in 1999, but lost out to WorldCom Inc. In the end, regulators nixed the WorldCom-Sprint deal, too, illustrating just how difficult some telecom acquisitions can be.

This story courtesy of TechWeb.

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