NCR Moves to Thwart AT&T;'s Takeover Bid

From Reuters

NCR Corp., counterattacking the hostile $6.12-billion bid by American Telephone & Telegraph Co., declared a special stock dividend Thursday and said it is placing a large block of its shares in employees' hands.

NCR added a special $1 one-time dividend and boosted its regularly quarterly payout to 37 cents a share, up from 35 cents previously.

The company also said it will put $500 million worth of preferred shares into an Employee Stock Ownership Plan. Each share will be convertible into an 8% common stock stake.

Dispersing shares to employees of the Dayton, Ohio-based company could make it more difficult for AT&T; to garner enough votes to oust NCR directors at a special meeting March 28.

"These actions, approved by all of the board members present at the meeting, further evidence our determination to continue to protect and build the values of NCR for the benefit of all of its stockholders," Charles E. Exley Jr., the company's chairman and chief executive, said in a statement.

AT&T;, the largest telephone company in the world, has been locked in a two-month battle for control of the nation's No. 5 computer company.

It unveiled a $90-per-share offer that has been rejected by NCR as inadequate, then drew up plans for a shareholder vote to try to oust the computer company's board.

Dispersing shares to employees of the Dayton, Ohio-based company could now make it more difficult for AT&T; to garner enough votes to oust the directors at a special meeting set for March 28.

"They're trying to move stock into the hands of those who will oppose the deal," said analyst William Baker of McDonald & Co. "It's an element of defense but won't discourage the deal.

AT&T; was not dissuaded by the move. "We are going to press forward with our efforts to acquire NCR," a spokesman said.

Stockholders holding about 70% of NCR's shares have already offered them to AT&T; in the takeover. That reflects the huge amount of stock owned by institutional stockholders, interested primarily in their investment return.

An appeals court also ruled Thursday that NCR must provide the telephone giant with its list of stockholders, allowing AT&T; to contact NCR shareholders directly.

The company said it has enough money for the special dividend since those funds have been used for years in NCR's stock repurchase program. It halted the repurchase program because of AT&T;'s hostile bid.

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