American Telephone & Telegraph Co. has lined up commitments for $6 billion in bank loans to finance its hostile bid for computer maker NCR Corp. and found sufficient enthusiasm that it had to turn some lenders away, the company said yesterday.
AT&T's lead bank, New York-based Chemical Bank, committed $600 million of its own money and arranged pledges from more than 50 U.S. and foreign banks for the remainder. The deadline for signing up had been next Friday, but the $6 billion goal was reached early and the sign-up was closed yesterday, the company said.
Wall Street had been watching the financing efforts closely because of predictions by some analysts that the economic downturn and suspicion of hostile takeovers would make it difficult for AT&T to raise the money.
AT&T Treasurer S. Lawrence Prendergast said in a statement that the response indicates lenders' "belief in the financial soundness of AT&T's offer."
AT&T last week offered to negotiate a $90-a-share purchase for the Dayton, Ohio-based cash register and computer maker, but NCR's directors rejected the offer, saying they wanted no sale at all -- but would be willing to talk about a deal if the price were $125 or more a share. AT&T responded by initiating a $90-a-share tender offer, seeking to buy the shares on the open market.
NCR's stock price has been bid up rapidly by the news of the battle. It closed yesterday at $91.25, down 50 cents, but still above AT&T's offering price. Its new range has fueled speculation that AT&T will have to raise its offer.
"The market pretty much is betting that there will be a successful tender and that it will be a price higher than $90," said an analyst at Mitchell Hutchins Institutional Investors Inc., which owns major quantities of NCR stock.
In another development, a federal judge in Baltimore dismissed a suit that AT&T filed in an attempt to stop certain provisions of Maryland's tough anti-takeover law from taking effect if a fight erupts over control of the NCR board. NCR is chartered in Maryland.
Judge Frederic N. Smalkin of U.S. District Court ruled that he lacked jurisdiction to rule on the request because AT&T's tender offer is not far enough along to set up such a fight.