AT&T; Corp. plans to raise as much as $3.19 billion by selling shares of its equipment business in the largest initial stock offering in U.S. history, according to regulatory filings made Tuesday.
Lucent Technologies Inc., as the new company will be known, filed with the Securities and Exchange Commission to sell at least 111 million shares at $22 to $25 each.
The company may sell as many as 16.6 million more shares, for as much as 20% of all Lucent shares, to meet investor demand. The other 80% of Lucent's shares would be distributed to AT&T; shareholders. This would mean AT&T; shareholders would receive one Lucent share for roughly three shares of AT&T.;
The Lucent offering would surpass the $2.4-billion initial stock sale of Allstate Corp. by Sears, Roebuck & Co. in June 1993.
The sale will initially value Lucent at almost $16 billion, giving it a larger market value than J.P Morgan Co., Xerox Corp. or Texas Instruments Inc. The proceeds of the sale will be used to pay down Lucent's debt and provide it with working capital, according to the filing.
Morgan Stanley Group Inc., Goldman, Sachs & Co. and Merrill Lynch & Co. are arranging the sale, which is expected to take place in April. The shares will trade on the New York Stock Exchange.
AT&T; spokeswoman Eileen Connolly declined to comment on the offering. A Morgan Stanley spokeswoman also declined to comment.
"This is a restructuring of one of the biggest and most important companies in America," said William Osborne, president of McKinley Capital Partners Ltd. in New York, which manages almost $100 million in assets and invests exclusively in new stock sales. "I don't even look at this as an IPO."
AT&T; stunned Wall Street in September when it announced it would split into three companies in an effort to boost its share price and profit, unload an unprofitable computer unit and prepare for increased competition in the recently deregulated telecommunications industry.
By the end of 1996, AT&T; will become three firms: AT&T; Corp., the telephone company; Lucent, an equipment maker; and NCR Corp., a maker of large computers.
Lucent has one of the brightest earnings outlooks of the three companies and could double its revenue within five years, investors and analysts say.
The AT&T; unit that will become Lucent had revenue of $21.4 billion in 1995, according to the filing.