ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, June 27, 1996 TAG: 9606270053
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: PHILADELPHIA
SOURCE: Bloomberg Business News
Bell Atlantic Corp. and Nynex Corp. said they are changing the legal structure of their $20.55 billion merger to sidestep extensive regulatory approval and combine the companies more quickly.
Nynex would become a wholly owned subsidiary of Bell Atlantic under the plan. The original merger agreement in April called for combining both companies into subsidiaries of a new holding company.
The move is specifically designed to skirt a little-known act of Congress dating back to 1913, which says that a utility in the District of Columbia needs full congressional approval to change hands. The companies are worried that Congress's schedule and public skepticism about big takeovers could delay the merger.
``A lot can fall through the cracks,'' said Tom Tauke, executive vice president of government affairs for Nynex.
The new plan would require that Bell Atlantic and Nynex get regulatory approval only from seven states in Nynex's region --Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont and Connecticut.
The original plan demanded that the companies also get approval in Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of Columbia.
Analysts said the new plan is a smart tactic.
``It's a wise move, given the regulatory impediments,'' said Barry Sine, analyst with SBC Capital Markets Inc. ``This will smooth the deal along, despite some of the comments from the state regulators.''
Bell Atlantic and Nynex said they plan to fully cooperate with state regulatory bodies.
``We have assured [state regulators] that we are interested in making sure they are comfortable with this deal,'' said Eric Rabe, a Bell Atlantic spokesman. ``We will seek from them either approval, or a statement from them that we don't need their approval.''
The companies would like to complete the regulatory procedure by the end of the year.
Bell Atlantic shares closed Wednesday on the New York Stock Exchange unchanged at $61.25. Nynex stock fell 121/2 cents to $45.75.
Under the new merger blueprint, Bell Atlantic would issue 345 million shares of new stock to Nynex shareholders. Nynex shareholders would also get 0.768 of a Bell Atlantic share for each Nynex share. That would give a new value to the merger of about $20.55 billion.
The original merger, which Bell Atlantic and Nynex maintained would be a combination of equals, was valued at $22 billion.
LENGTH: Medium: 55 lines ILLUSTRATION: GRAPHIC: Chart by AP: Merger becomes takeover. color.by CNB