NCR’s Board Now Willing to Talk With AT&T; : Communications: The change in heart comes just days before shareholders are scheduled to vote on the phone company’s takeover bid.
After steadfastly refusing American Telephone & Telegraph’s hostile takeover advances for nearly four months, NCR Corp. said Sunday that it is now willing to talk as soon as possible about a deal worth more than the $100-per-share price AT&T; last offered.
NCR’s announcement came just four days before its shareholders are scheduled to vote on AT&T;’s offer and followed a week of disappointing developments in the computer maker’s fight to elude takeover by the nation’s largest telecommunications company.
Analysts said NCR’s move strengthens the possibility that the two companies will negotiate an end to their bitter and costly fight before Thursday’s NCR shareholder meeting. At that session, NCR stockholders are scheduled to vote on AT&T;’s proposal to oust the entire NCR board in favor of a slate of AT&T; candidates favorable to the takeover.
Analysts have widely speculated that AT&T; would have to offer a stock swap of at least $105 to $110 per share to win approval from NCR’s board. NCR closed at $98.25 Friday on the New York Stock Exchange.
Following a special meeting of NCR’s board Sunday, Chairman Charles E. Exley Jr. said the company would consider “an appropriate transaction” with AT&T; at a price “substantially above” AT&T;’s $100-a-share bid. In addition, Exley said NCR would give AT&T; “appropriate information” to support its demand for a higher price.
AT&T; said late Sunday that it was pleased with the NCR position and hoped the companies would meet soon. “We would like to have an agreement before Thursday,” an AT&T; spokesman said. As of late Sunday, no meeting had been scheduled.
Although little in NCR’s latest announcement represents a major shift in the company’s position toward AT&T;, it was nevertheless widely viewed by analysts as an indication that NCR is finally willing to negotiate its acquisition by AT&T.;
The nation’s fifth-largest computer maker has long maintained that it is worth $125 per share and that AT&T; ought to give NCR shareholders full value for the company it so desperately wants in order to bolster its own sagging computer operations. However, NCR did not repeat its earlier demand that AT&T; offer $125 per share before NCR would even negotiate the terms of a deal, or provide confidential information about the company’s operations.
Analysts said NCR’s negotiating position was seriously weakened last week by three unrelated developments.
On Tuesday, a federal judge in Dayton, Ohio, invalidated NCR’s new employee stock ownership plan. The plan, which put an additional 8% of NCR’s stock into its employees’ presumably friendly hands, would have made it nearly impossible for AT&T; to gain the 80% support it needs this week to replace the entire NCR board. However, with the plan nullified, AT&T;’s proxy solicitor has said the company has the required votes to install its own candidates on the NCR board.
On the same day, International Business Machines said its profits would be half what Wall Street analysts and investors had expected, due to a steep, global slowdown in spending for computers that was affecting all computer makers. That announcement sent the stock market, led by a large selloff in technology stocks, plunging 62 points.
Finally, on Friday, the Federal Communications Commission said it would not investigate the takeover effort because any merger would not affect AT&T;’s ability to provide long-distance telephone service.
Since AT&T; launched its takeover drive in early December with a $90-per-share offer, most stock analysts have predicted that it would end with a negotiated transaction.
