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AT&T tracking stocks loom
May 11, 2001: 6:01 p.m. ET

Company seeks approval to create two tracking stocks as part of restructuring
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NEW YORK (CNNfn) - AT&T Corp. moved one step closer to fulfilling its restructuring plans Friday, seeking shareholder approval to break into four separate companies.

AT&T plans to create two tracking stocks: one to reflect the performance of its consumer unit, the other for its broadband business. AT&T also seeks to separate a company comprised of its business and consumer units from the broadband business, the company said in a filing with the Securities and Exchange Commission.

The nation's No. 1 long-distance telephone and cable company expects its restructuring plans, announced last October, to be completed this year.

AT&T is creating four businesses: AT&T Wireless, AT&T Broadband, AT&T Consumer, and AT&T Business. The proxy filed Friday is preliminary and subject to amendment and completion, AT&T said.

Shareholders will be asked to vote on the proposals at a meeting slated for late summer or early fall, AT&T Corp. said in a statement. The company plans to create a new class of consumer tracking stock that will reflect the performance of its existing residential long distance and WorldNet Internet access businesses. AT&T plans to distribute some or all of the unit's tracking stock to AT&T shareholders by the end of the year.

New York-based AT&T (T: up $0.49 to $21.90, Research, Estimates) will also create a new class of stock to track the performance of its broadband unit. The firm may offer a portion of the broadband stock in an initial public offering before the end of the year, depending on market conditions.

AT&T will redeem the broadband tracking stock for asset-based common stock about a year after the IPO. AT&T will then separate the remainder of the firm, which will operate under the AT&T Corp. name, from the broadband unit and create two separate, public companies.

The proxy filing also signals the independence of Liberty Media. In April, AT&T won a favorable tax ruling that will allow the firm to spin off Liberty.

By mid-summer, AT&T will redeem Liberty Media tracking stock shares for shares of Liberty Media Corp. common stock. Once the shares are converted into an asset-based security, Liberty will be launched as an independent public company, AT&T said in a statement. graphic