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AT&T to offer stockholders $10 billion in wireless shares

AT&T files with the Securities and Exchange Commission to allow stockholders to trade their Ma Bell stock for a pool of up to $10 billion in AT&T Wireless shares.

AT&T has told regulators that it will soon allow stockholders to trade their Ma Bell stock for a pool of up to $10 billion in AT&T Wireless shares.

The company filed papers late last week with the Securities and Exchange Commission detailing plans to distribute many of the remaining shares in its wireless division to its shareholders. AT&T Wireless, which trades as a tracking stock under the ticker AWE, is slated to be spun off as a separate company under the giant's four-part breakup plan.

Details were not yet available on the ratio of wireless shares to ordinary shares. That would be determined based on market prices at the time of the trade, which will happen "as soon as possible in the coming months," the company said.

About 16 percent of AT&T Wireless shares were released in the tracking stock's IPO last April. The division has since lost about a third of its value amid general fears about debt and profitability plaguing the telecommunications sector.

AT&T itself is trading at historic lows, which has helped prompt the breakup plan.

Wireless stocks have traditionally been viewed as more of a risky, high-yield investment than their staid telecommunications brethren, according to analysts. AT&T had initially hoped to boost its own aggregate value by releasing the wireless division as a tracking stock.

But the draw of the various AT&T properties is changing. The ordinarily safe traditional phone business is suffering plummeting revenue and recently was forced to slash the dependable dividends the company pays investors. That's likely to reduce the incentive conservative investors might feel to stick with Ma Bell's shares, instead of trading them for AT&T Wireless stock.

After the exchange offer, the company plans to distribute the remaining AT&T Wireless shares to holders of AT&T common stock as a prelude to cutting the division loose, it said.

The exchange plan still must be approved by federal regulators. The final size of the exchange will be determined in large part by shareholder interest, the company said.