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AT&T seeks shareholder vote on wireless IPO

AT&T outlines plans for a new tracking stock of its wireless division in documents filed with federal securities regulators.

AT&T outlined plans for its new wireless division tracking stock today in documents filed with federal securities regulators.

The company plans to sell separate shares in its thriving mobile phone division later this to raise funds and catch up to the soaring market valuations of competitors such as Sprint PCS.

AT&T said it will hold a meeting of shareholders about a month after regulatory approval, according to its filing with the Securities and Exchange Commission. The initial public offering will occur shortly after shareholder approval, the company said.

The company has set no firm dates for any of these moves, however.

"The exact method and timing of the issuance of this tracking stock will depend on market conditions and any other factors that help us determine which method is in the best interests of AT&T shareholders," AT&T CEO Michael Armstrong wrote in a draft letter to shareholders.

Analysts expect the share sale to be one of the largest IPOs ever, surpassing last year's United Parcel Service offering, which raised $5.47 billion.

AT&T Wireless is currently the largest mobile phone company in the United States, with about 12 million subscribers and revenues of $5.5 billion for the nine-month period that ended in September.

The company has said that it will sell less than 20 percent of its wireless division in the IPO, but has given no more details than that.

How much the IPO raises "depends on how much of the company will be available to the public," said Eric Melloul, a financial analyst with Argus Research. "But it will be one of the largest, if not the largest" IPOs.

By way of comparison, Sprint's PCS mobile phone division, which is also run as a tracking stock, currently has a market valuation of more than $47 billion.

AT&T's total wireless valuation is likely to exceed that, because the new division will also include AT&T's fixed wireless assets as well as interests in mobile phone companies in Colombia, India and Taiwan. Melloul said the division's valuation could range as high as $60 billion to $80 billion, depending on market conditions and the final list of assets included in the bundle.

Offering even 10 percent of those shares to the public could raise as much as $6 billion to $8 billion.