WASHINGTON -- AT&T Corp.'s sale of stock in its wireless telephone business could raise as much as $11.5 billion, making it the biggest initial public offering in U.S. history.
New York-based AT&T plans to sell 360 million shares for $26 to $32 apiece, offering new investors the equivalent of about 16 percent of the unit, according to a filing with the Securities and Exchange Commission.The top price would give AT&T's wireless business a market value of $74 billion. That's equal to almost 40 percent of parent AT&T's market capitalization today, and more than the entire company was worth in December 1996. Analysts said the wireless business is one of AT&T's most valuable assets right now.
"It's probably one of the best segments in the company overall from a growth standpoint," said James Hern at Olde Discount Corp., based in Detroit. "Wireless valuations right now are trading near their all-time highs."
The stock sale will raise as much as $7 billion for the wireless business, which will use the money to expand its network, for possible acquisitions, and for capital expenditures. Parent AT&T, in the meantime, would get as much as $4.5 billion.
"I think it'll get a pretty good reception," said Steven Tuen, co-manager of the $1.7 billion Internet Fund. "Wireless is a growth area, not simply just for wireless the way we normally view it, but also for high-speed Internet access."