SBC, Prodigy agree on tender price

SBC Communications will purchase all outstanding shares of Prodigy Communications’ Class A common stock for $6.60 per share--$1.15 per share over SBC’s tender offer of Sept. 21--the companies announced today.

Prodigy shareholders balked at SBC’s initial offer, saying it wasn’t enough, even though it represented a 54% premium over the value of the stock at market close on Sept. 21. Prodigy’s stock price closed at $6.25 per share …….

However, a committee consisting of three independent board members has approved the new offer. As a result, Prodigy said it will recommend that its shareholders accept the offer--which represents a 64% premium over the stock’s average closing price for the calendar year through Sept. 21, according to a joint statement--and approve a merger of the two companies.

Currently, SBC owns 42% of Prodigy. Mexico’s national telco Telmex and Carso Global Telecom--owned by Telmex chairman and SBC board member Carlos Slim Helu--own 59.3% of the Class A common stock, which represents about 34% of the voting equity in the company. According to the joint statement, both Telmex and Carso Global Telecom have said they would accept the new offer.

The transaction, which is subject to shareholder and regulatory approval, is expected to close in the fourth quarter.

--Glenn Bischoff, senior news writer