AT&T; Seeks Holders’ OK for Restructuring

At its annual meeting this week, AT&T; Corp. must rally stockholders behind its plan to split into four separately traded companies and convince investors the massive restructuring will boost shareholder value, analysts said.

AT&T;, the No. 1 U.S. long-distance telephone and cable television company, needs shareholders to be patient even though questions remain unanswered about its management appointments and international strategy.

At the meeting Wednesday, which is being held in Cincinnati, AT&T; shareholders will vote on a proposal to amend the company’s charter in a way that would make it easier to get the required votes for its planned restructuring.

“It’s like knowing you have to go to a funeral and you don’t want to go,” said Debra McNeill, portfolio manager of the Fremont Growth Fund.

AT&T; in October said it would split its major units--consumer, business, broadband and wireless--so each business could focus on its own market niche and compete more nimbly. The separate entities would be able to make acquisitions or investments unencumbered.

“It’s a matter of rallying the troops around the plan. I don’t think upbeat’s the tone it will take, because everything is still in limbo. It’s more a matter of asking everyone to have patience and see things through,” said telecommunications analyst Jeffrey Kagan.

The reorganization marks a reversal of the company’s strategy to become an “all-distance” communications company that sold packages of local, long-distance, wireless telephone and Internet access services. It also dismantles nearly three years of $100 billion in acquisitions by the corporate giant.

AT&T; launched the reorganization to fend off complaints from Wall Street about its flagging stock performance and growth outlook.

Since last year’s shareholder meeting, AT&T;’s stock has dropped about 39%, underperforming the North American Telecommunications index by about 13%. The telecom index, meanwhile, lagged the broader Standard and Poor’s 500 index by 24% during that same time.