January 22, 2004, 1:13 PM — The board of directors for AT&T Wireless Services Inc. is exploring the sale of the company, AT&T Wireless officials confirmed Thursday.
Chief Executive Officer John Zeglis told financial analysts during an earnings report that there's been "much interest" in the company, although company officials declined to name suitors or set a timeline for the sale of the company.
The company also issued a four-paragraph press release saying it has decided to "explore strategic alternatives" due to "significant interest" from a number of companies.
"The board will consider the company's options and determine the course of action this is in the best interest of its shareholders," the press release said. The company has hired Merrill Lynch & Co. and Wachtell, Lipton, Rosen & Katz, a New York law firm, to evaluate offers, according to the press release.
According to media reports, Cingular Wireless LLC, NTT DoCoMo Inc., Vodafone Group PLC, T-Mobile USA Inc. and Nextel Communications Inc. are all interested in buying AT&T Wireless.
Because of a fairly strong financial position, AT&T Wireless will be in the driver's seat in sales negotiations, said Jeff Kagan, an independent telecom analyst, in an email. "I am sure their shareholders are loving it, because they don't have to do a deal unless it benefits them," Kagan wrote. "What a great position to be in."
AT&T Wireless postponed an analyst meeting next week in order to focus on sale negotiations, Kagan said. "They are the belle of the ball right now," he added. "Now they can take the time they need to evaluate, without distraction, all the various companies and approaches. AT&T Wireless is in no rush to make a decision. There is no pressure on them. In fact, one option is not to merge at all."
Company spokesman Peter Rowe said he couldn't comment further, but he emphasized the highlights of AT&T Wireless' earnings report Thursday. The company's fourth-quarter loss was US$84 million or $0.03 per share, compared to a loss of $131 million or $0.05 per share a year earlier. AT&T Wireless' fourth quarter services revenue was $3.9 billion, up 4.4 percent from the last quarter of 2002.
Analysts surveyed by Thomson First Call had forecast a break-even fourth quarter for the company.
AT&T Wireless experienced a couple of problems in the fourth quarter related to customer care software glitches and number portability, Kagan wrote, but he called those problems "isolated incidents."
"The bright side is the worst should be over and the company remains one of the strongest and well positioned, which is why they are the focus of so much merger attention," Kagan added.