AT&T; Plans Proxy Fight for Control of NCR’s Board

Signaling once more its determination to buy NCR Corp., American Telephone & Telegraph announced on Sunday that it will seek to take over NCR’s board and disarm the computer maker’s anti-takeover defenses.

Such a proxy challenge was widely expected following the NCR board’s unanimous vote last Thursday to reject AT&T;’s $6.1-billion, $90-per-share cash offer for the nation’s fifth-largest computer firm.

AT&T; responded Sunday by saying that it will seek shareholder proxies to call a special NCR shareholder meeting. It also will seek proxies for the regular NCR annual meeting scheduled for April 17.

To force NCR to call a special stockholder meeting, AT&T; must persuade owners of at least 25% of NCR’s stock to request a meeting--a requirement that it could easily fulfill if its tender offer is accepted by one-quarter of NCR’s shareholders.

If AT&T; succeeds in its fight to unseat NCR’s board, it could install its own directors--people both willing to negotiate a merger and to nullify NCR’s strong anti-takeover provisions.

The nation’s largest telephone company also said Sunday that it is extending its tender offer deadline to midnight Jan. 15--from Jan. 4--because of the holiday season. The company said it mailed tender offers to NCR shareholders during the middle of last week. As of last Friday, it said, no shares had been tendered.

NCR responded to AT&T;’s latest moves by saying that “AT&T;’s threat of a proxy contest does not change NCR’s position” that the buyout offer is “grossly inadequate and unfair to our shareholders.”

NCR last week started lobbying its major shareholders--including pension and insurance funds--to persuade them to not accept AT&T;’s offer.

Despite NCR’s steadfast rejection of the offer--and NCR Chairman Charles E. Exley Jr.’s repeated contention that a merger would be a mistake--analysts nevertheless expect a deal to be struck, either between the firms’ boards or through a successful tender offer.

Noting that NCR’s stock closed Friday at $88.875 per share, more than $1 below AT&T;’s offer, analysts said shareholders can hardly be expected to walk away from a price higher than the market is offering. The current price is more than 50% higher than it was when news of the takeover surfaced in early November.

“Why wouldn’t the shareholders tender?” asked John B. Jones, a technology analyst at Montgomery Securities in San Francisco. “The arbitragers are in it for the profit, and the institutions hold stock to make money for pension plans and insurance companies. There’s no good reason for them not to sell.”

Jones said he doubted that many large shareholders would be persuaded by Exley’s personal pleas that NCR deserves the right to execute its business plan without interference from AT&T;, and that this plan will result in even greater shareholder value in the future.

“It’s the old saying,” Jones noted. “One in the hand is still worth more than two in the bush.”

Since launching its takeover bid Dec. 3, AT&T; has repeatedly said that it wants Dayton, Ohio-based NCR to bolster its efforts to become a major player in the computer business as well as a significant force in the emerging convergence of computer networking and telecommunications technologies.

AT&T; has lost billions of dollars in the computer business since entering it in 1984 following the divestiture of its regional Bell telephone companies. AT&T; has said that NCR’s technology and product line are compatible with its own and that the combined operations would allow AT&T; to take advantage of the explosion of computer telecommunications expected in the coming decade.

NCR, in repeatedly spurning AT&T;’s overtures, has contended that few, if any, mergers betweenhigh-technology companies have been successful and that it is committed to pursuing its own corporate strategy. However, the NCR board has said that it would be willing to negotiate with AT&T; if the telephone giant would offer $125 per share and agree to other conditions before bargaining could begin.