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A deal worth how much??
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June 24, 1998: 5:59 p.m. ET
In the fickle world of mega-merging number-crunching, values are fleeting
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NEW YORK (CNNfn) - It doesn't take a rocket scientist to tell you that the AT&T-TCI deal is, well, a big deal.
But a rocket scientist would have come in handy Wednesday as analysts and financial mavens at the combining companies themselves number-crunched their way into a mega-merging mess of conflicting values that left Wall Street gurus scratching their collective heads.
The roller-coaster ride began at sunrise, shortly after AT&T chairman C. Michael Armstrong christened the merger "a big deal…a $68-billion-plus deal." Armstrong said he arrived at his whopping sum by taking the values of stock, assumed debt, and $20 billion in "value" of Liberty Media Corp., the cable programming arm of TCI.
That seemed sound enough, except for one thing: it was wrong. By that method, AT&T would apparently be counting Liberty Media twice since its value is already included in the value of TCI. So that reduced the deal's price tag to $48 billion, right?
Sort of.
Despite the official clarification - setting the purchase price at $48 billion - other deal-watchers begged to differ. Securities Data Corp. of Newark, N.J., did its math and came up with $45.3 billion. Meanwhile, The Wall Street Journal dispensed with the debt factor altogether, pegging the deal's worth at $32 billion -- less than half the value touted in Armstrong's reveille proclamation. The Journal did note the assumed debt as an aside.
Not that this all matters in the end. After all, the AT&T-TCI linkup is indisputably the fourth- biggest merger ever. Or fifth biggest. Or sixth biggest. Or…
--By staff writer Douglas Herbert
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TCI
AT&T
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