AT&T; Likely to Negotiate With NCR After Bid Fails
A negotiated settlement to American Telephone & Telegraph’s hostile takeover bid for NCR Corp. appears likely after it became apparent that AT&T; had failed to win complete control of NCR at Thursday’s shareholder meeting, officials from both sides said after the session.
A deal “sounds closer to me,” NCR Corp. Chairman Charles E. Exley Jr. said. “An initial meeting has been held, and I anticipate further meetings.”
Robert M. Kavner, director of AT&T;’s computer division, said he also expected negotiations to resume, although he offered no schedule or estimate of when a deal could be struck.
“We were encouraged by the meetings late (Wednesday) afternoon and evening with NCR’s advisers,” Kavner said. NCR’s willingness to negotiate “represents movement, and we see that as a potential breakthrough.”
NCR shareholders also appeared heartened by the possibility of a friendly merger. NCR shares jumped $2 per share to close at $99.625 in New York Stock Exchange trading Thursday, while AT&T; shares dipped 50 cents per share to finish at $34.25.
AT&T;’s nearly four-month-long takeover drive for NCR, the biggest merger effort in the nation so far this year, has been stalled from the beginning over price. AT&T;’s highest offer so far has been $100 per share, while NCR’s lowest demand has been $110 per share.
Although the companies’ differences narrowed this week, AT&T; pressed ahead with its request to NCR shareholders to oust the entire NCR board and to replace it with a board favorable to the merger.
But Kavner said Thursday that a preliminary review of the voting indicated that AT&T; did not receive the necessary 80% shareholder support to replace the entire NCR board.
Kavner said AT&T; probably won the 50% vote necessary to gain four seats on NCR’s 12-member board. However, that is insufficient to give AT&T; what it really wants: complete ownership of NCR, the nation’s fifth-largest computer maker, for an acceptable price.
Exact results of the voting won’t be known for a few weeks, but Kavner’s remarks represented the first indication of shareholder sentiment toward the takeover. These results are in line with what analysts and officials of both companies had expected.
AT&T; had originally offered $90 per share for NCR and then increased it to $100 per share. But Exley rebuffed both offers, and until earlier this week, refused to negotiate with AT&T; unless it would offer $125 per share.
Exley eased his stance Sunday and the following day met for more than five hours with AT&T; Chairman Robert E. Allen to negotiate a settlement. But the talks broke down over price, and the two sides did not meet again until Wednesday afternoon when NCR lowered its demand to $110 per share. AT&T; rejected it.
