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Subject:  Re: Inconceivable or not?? Date:  2/1/1999  7:19 PM
Author:  Scollag Number:  4046 of 55215


Good post. It is always sensible to look out for what MS can do to spoil things for everyone.

In this case, though, I think we have lead underpants. Even after the dilution caused by the XCIT merger, TCI retains a substantial stake of the equity. It was c.38% before the XCIT announcement, BUT around 70% of the voting rights. It is a little difficult to explain, but TCI holds stock in a different series from the rest of us, which is convertible to "our" series of stock to establish the 38%. However, each share of the TCI series carries ten times the voting power of the other series. This is how the difference between the 38% and 70% arises.

I haven't done any calculations on the dilution effect on these golden stakes, but I would be surprised if TCI/ATT ended up with less than 50% of the voting rights - in which case MS could never obtain a controlling interest without buying AT&T, or perhaps by outbidding ATT for TCI before the deal is approved by both boards.

Outside the box is the best place to think.
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