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Shareholders approve sale of AT&T Wireless

By Times staff and wire Services

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Of the shares voted, 98 percent favored the merger, Redmond-based AT&T Wireless said in a statement. Shareholders rejected three proposals, including two on executive compensation, the company said.

Cingular's February agreement to buy AT&T Wireless for $15 a share would create a carrier with 46 million customers. The transaction still needs approval from the Federal Communications Commission (FCC) and Justice Department, which must determine that it complies with antitrust law and doesn't harm competition.

AT&T Wireless Chairman and Chief Executive John Zeglis said the appropriate applications have been filed at the FCC and the company is preparing to respond to questions posed by the Department of Justice. Those answers should be ready in the next few weeks, he said.

"Both sides are targeting the fourth quarter, or by the end of the year" to close the deal, he said.

In April, the company said it lost customers for the first time in its history and that it was not profitable in the first quarter of this year.

That was the result of two events at the end of last year that led to higher customer turnover. A federal law allowing customers to transfer their cellphone numbers when they switched carriers went into effect. The company also was hampered by difficulties during an upgrade of internal software, which resulted in customer-service problems that prompted many to switch services.

The company announced in January that it was for sale, and after an intense bidding process lasting a month, it announced Cingular the winner.

Zeglis said yesterday that an acquisition was just one of the possible outcomes he saw for the company when he was appointed chief.

"In business, you look to grow value for our shareholders," Zeglis said. "That's what I saw as my job from Day 1. That may have included merging, or selling maybe — it's all part of the job."

When the sale is completed, he said, he's going to spend some time teaching and sitting on boards, which might include fund-raising for education.
 
When asked if he thought about his next plans, he said, "It's not going to be another job like this. I've been in the eye of the storm for 30 years."

AT&T Wireless shares rose 2 cents to $13.97 yesterday. They've more than doubled in the past year.

Atlanta-based Cingular — the nation's second-largest wireless carrier, which is jointly owned by SBC Communications and BellSouth — doesn't have publicly traded shares. Verizon Wireless is the nation's biggest mobile-phone operator, with 38.9 million customers at the end of March.

Information from Seattle Times business reporter Tricia Duryee and Bloomberg News is included in this report.