COLLAPSE OF A MEGA-MERGER : How the Deal Came Apart

Some blame the collapse of Bell Atlantic’s plan to buy Tele-Communications Inc. on federal regulators, but market forces were the immediate cause: Wall Street became unenthused about the stocks, a trend made worse by rising interest rates.

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“These two companies (TCI and Bell Atlantic) were among the most aggressive in espousing the wonders of the new communications superhighway and to the extent the deal has fallen I think you” have to blame government regulation.” -- Amos B. Hostetter, chairman of Boston-based Continental Cablevision.

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“The deal broke up because of all the uncertainties. They were unable to each an agreement on a price. You can’t price an unknown. It will effect all the other deals being discussed. Certainly things have ground to a halt.” -- Gustave Hauser, Chief Executive, Hauser Communications

The Shares Have Slumped . . .

The stocks’ prices began dropping shortly after Bell Atlantic and TCI announced the merger plan Oct. 12. Some investors believed Bell Atlantic was overpaying.

TCI shares, weekly closes except latest: Thursday: $22.375, down 1.875

Bell Atlantic shares, weekly closes except latest: Thursday: $54.50, up 1.74

. . . As Interest Rates Have Surged

Rising bond yields cause investors to turn away from high dividend stocks such as phone utilities in favor of bonds. So the surge in rates since October has helped clip Bell Atlantic’s shares.

30-year Treasury bond yield Thursday: 6.73%