By HARRY R. WEBER
The Associated Press
ATLANTA -- When AT&T Inc. announced its blockbuster deal to acquire BellSouth Corp. in March, the companies said it would take a year to close. Since then, they moved up the date twice, amid expectations it would get pushed through without much trouble.
Three FCC delays later, it's a guessing game when it will be approved and under what conditions. The two companies said they are confident the deal will close before deadlines imposed by the agreement.
But were the companies too optimistic about how long it would take?
In April, BellSouth moved up the expected closing of the deal to the end of this year. In July, it said in the fall, leading some to think October. The company also made preparations for how it would notify employees about the deal closing, spokesman Jeff Battcher said, noting those plans are easy to extend.
"I don't want you to think we have to keep re-icing the champagne, because that's just not the case," Battcher said.
The agreement says the deal can be terminated at any time by mutual consent of the companies' boards of directors. It also says that one side can pull out if the deal does not close by March 6, subject to a $1.7 billion termination fee. That deadline could be extended until Sept. 6, at which time the deal is terminated if it hasn't closed.
Monday marked 207 days since the FCC's public notice on the deal went out, already longer than the 199 days it took for the agency to approve the combination of SBC Communications Inc. and the former AT&T Corp. and the combination of Verizon Communications Inc. and MCI. Two more days and it passes the 208 days it took the FCC to approve Cingular's $41 billion purchase of AT&T Wireless in 2004, according to an FCC clock on its Web site. The Alltel Corp.-Midwest deal took 276 days for FCC approval, the agency's clock says.
The FCC generally sets a goal of voting on a deal within 180 days of public notice, but can take longer for more complex cases.
Atlanta-based BellSouth and San Antonio-based AT&T said neither side is talking of pulling out, and officials remain confident the deal, now valued at $79.9 billion excluding $22 billion in BellSouth debt AT&T plans to assume, will be approved soon without any onerous conditions attached.
"The deal is going to get done, it's just taking longer than we had thought," Battcher said. "We just have to work through the political process, and that's what it is right now."
AT&T spokesman Dave Pachoczyk agreed.
"I don't know that anyone is seriously thinking about anything more than the immediate," he said, referring to next year's deadlines. "It's been approved by everyone else with no conditions. We don't believe conditions are required."
Pacholczyk said that earlier this year "all indications were ... that this was going to be a fairly uneventful approval."
"We're trying to do what we can to make sure that this is -- that we've given everything we can that shows we're willing to or able to get the FCC to move," he said.
The latest prediction on timing could still hold true -- by a week -- if the deal is approved at the FCC's next meeting on Dec. 14 or before then by electronic voting. An agenda for the meeting has not yet been released. Battcher said the sides are working behind the scenes to see if there are conditions they can agree to.
Analysts say there's too much at stake for the deal not to go through.
"It's a must-have deal for AT&T and BellSouth and whatever needs to get done will get done," said Patrick Comack, a telecommunications industry analyst with Zachary Investment Research.
Kent Custer, a telecommunications analyst for A.G. Edwards & Sons Inc., said he's not surprised by the delay in approval.
"It is a very large merger, there are significant consumer, and in some people's views, antitrust issues that need to be resolved," he said. "In order for it to get approved by October, that was very ambitious. It required a certain set of events to happen. It's not surprising that that didn't happen and so now they're regrouping."
Chris King, an analyst for Stifel Nicolaus & Company Inc., said the bigger question is going to be what kind of conditions will be put on the deal.
"I don't think either side would cancel the deal if they have a reasonable shot of getting it approved," King said.
The one constituency not shaking its head is Wall Street. Investors have kept BellSouth's stock near a 52-week high.
"The market has considered it to be a done deal," Custer said.
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