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NCR Accuses AT&T of Bad-Faith Bargaining

April 8, 1991

NEW YORK (AP) _ NCR Corp. is accusing American Telephone and Telegraph Co. of insincerity and stubbornness in efforts to agree on a takeover price for the computer company, which the long-distance telephone giant has been pursuing for nearly six months.

Charles E. Exley, chairman of NCR, escalated the tension in the stalled takeover talks between the two on Sunday by releasing details of a pointed letter to AT&T counterpart Robert E. Allen that accuses AT&T of bad faith bargaining.

″It is beginning to look as if AT&T is not interested in pursuing constructive discussions which would lead to a negotiated transaction, but is instead only interested in painting an erroneous picture of NCR as being unwilling to do so,″ Exley wrote.

Exley, who told Allen in the letter, ″Bob, the ball is in your court,″ said in a telephone interview that no more negotiations were scheduled. AT&T said Friday that the talks were at a standstill.

The NCR chairman’s letter also said AT&T had brushed aside a serious offer by NCR to sell at $110 per share, which values the company at $7.48 billion. Exley said the offer was a reasonable and ″a very low price.″

That price is ″too rich for our blood,″ said AT&T spokesman Walter Murphy, responding to Exley’s letter. AT&T has offered as much as $100 a share for the company.

Murphy also disputed Exley’s contention that the subject of a meeting between the two chairmen last Thursday should have been kept secret. AT&T said after the meeting that Exley told Allen the $110 price was non-negotiable.

The rhetorical tussle was the latest sign of deteriorating takeover talks between the two companies, which have led both sides to publicly accuse each other through the media of bad-faith negotiations over the past few weeks.

AT&T has been pursuing a takeover of NCR for nearly six months, part of a broader effort to strengthen its own foray into the highly competitive computer business. NCR has repeatedly tried to thwart the effort through a combination of legal maneuveurs and appeals to its shareholders, while at the same time not ruling out a negotiated deal.

At a pivotal shareholder’s meeting late last month, NCR defeated AT&T’s initiative to replace its entire board of directors, which would have laid the groundwork for AT&T to easily acquire the company.

However both sides indicated for the first time they were sincerely trying to negotiate, which suggested to shareholders and industry analysts that a peaceful takeover might be inevitable and that price was the only obstacle.

Doubts about the negotiations rose Friday when AT&T said the talks were at a standstill and NCR deplored AT&T for even disclosing the discussions.

Reflecting the pessimism, NCR’s stock price declined Friday to $97.75 in New York Stock Exchange trading, down $1 from Thursday and $2.87 1/2 for the week.

Exley on Sunday continued to take Allen to task, saying that AT&T should look more closely at the value of NCR as a takeover target before dismissing the offered stock price as too high.

″They seem to be intransigent on this thing,″ Exley said in a telephone interview from NCR’s Dayton, Ohio headquarters.

Exley, while describing his meeting as ″cordial and polite,″ said ″I don’t know why they’re not interested in learning more about our business.″

He also said NCR would shortly be announcing a major innovation in large- scale computer systems, which would reinforce the his position that the company is worth its asking price.

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