Bell Atlantic board votes for merger with Nynex Corp. N.Y. company's directors to decide this morning on joining of phone firms

April 21, 1996|By NEW YORK TIMES NEWS SERVICE

NEW YORK -- Bell Atlantic's directors voted yesterday to merge with Nynex, according to several people familiar with the discussions. The combination of the two regional Bell operating companies would create the nation's second-largest telephone company after AT&T.

Although Nynex's board must still vote on the merger, people close to the companies said they expected it to be approved. Bell Atlantic Corp. and Nynex Corp. hope to announce the deal at a news conference in New York tomorrow.

Yesterday's vote came after several hours of discussion. But one person familiar with the meeting said the length of the deliberations should not be taken as an indication that they were rancorous.

People familiar with the company said Bell Atlantic's directors had already been extensively briefed on the talks. Because of the size of the deal, board members wanted ample time to go over the legal, financial and management details.

A merger of Bell Atlantic and Nynex would rank as one of the largest corporate deals in history -- creating a communications colossus with $27 billion in annual revenue. The combined company would serve 36 million residential and business customers in a territory stretching from Maine to Virginia.

Under the terms of the merger, shareholders of Bell Atlantic and Nynex would swap their shares for shares in the new company. People close to the deal said investors would transfer their shares at a ratio of roughly six shares of Bell Atlantic for every five shares of Nynex.

As a result, shareholders of Bell Atlantic would end up owning slightly more than half of the combined company. Executives close to the talks said the relative value of Nynex compared with that of Bell Atlantic became a flash point in the final weeks of negotiations because the shares of Nynex rose strongly on speculation about the deal.

Bell Atlantic contended that -- for purposes of the merger -- Nynex ought to be valued at below its current market value.

The final terms of the deal were not clear yesterday, although people close to the talks said that Nynex had agreed to a modest discount.

Bell Atlantic and Nynex have been discussing a merger for months in a courtship that has been every bit as public as that of a Hollywood celebrity. The talks accelerated earlier this month when two other Baby Bells -- Pacific Telesis and SBC Communications -- announced that they would merge in a deal valued at $17 billion.

Under the terms of the deal, Raymond W. Smith, chairman of Bell Atlantic, would run the new company for one year and then retire. Ivan G. Seidenberg, the chairman of Nynex, would be vice chairman and chief operating officer and then succeed Mr. Smith.

Nynex's board was to take up the deal in a telephone conference call this morning.

Pub Date: 4/21/96

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.