GTE Shareholders Put Up Anti-Takeover Defenses
GTE Corp.’s stockholders voted by a margin of three to one at a special meeting Wednesday to approve several measures aimed at staving off unwelcome takeover attempts for the telecommunications concern.
GTE proposed the measures last month and adopted other steps aimed at boosting the value of its stock, after detecting heavy trading in its stock that sparked rumors that the company might be a takeover target. Then, in early December, the Belzberg family of Canada said it had acquired a substantial stake in the company but less than the 5% that requires notification to the Securities and Exchange Commission.
The Belzbergs, through Vancouver-based First City Financial Corp., which they control, have since offered to buy GTE’s stakes in two Canadian telephone companies, but were rebuffed. And on Tuesday, First City Chairman Samuel Belzberg urged GTE to spin off to shareholders its half-ownership of US Sprint Communications, the nation’s third-largest long-distance telephone service (after AT&T; Communications and MCI Telecommunications), as well as its mobile telephone business.
GTE President Theodore F. Brophy on Wednesday answered Belzberg with a letter of his own, saying it was “not generally in the best interest of GTE shareholders for this corporation to treat its businesses like commodities that are always for sale.” Brophy said GTE feels that US Sprint “can become a successful and profitable competitor to AT&T; in the intercity communications market.”
He added that “We do recognize the earnings problem that US Sprint has faced and we are actively addressing that matter.”
Brophy also wrote that GTE’s British Columbia Telephone Co. and Quebec Telephone Co. “are not for sale.”
“We have turned them down once before, and our position is still that those companies are important elements of our business,” Brophy told shareholders. (GTE runs the U.S.’ largest systems of non-Bell telephone operating companies.)
In giving the nod to management, shareholders approved an increase in the number of authorized shares, reduced the par value of its common stock and required approval by 80% of the shareholders for stock repurchases. In addition, the shareholders approved an extension of the terms of certain board members and staggered terms of office for them.
