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AT&T Inc · S-4/A · On 6/2/06

Filed On 6/2/06 1:22pm ET   ·   SEC File 333-132904   ·   Accession Number 950123-6-7322

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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 6/02/06  AT&T Inc                          S-4/A                 16:269                                    Bowne of NY City...01/FA

Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction   ·   Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4/A       Amendment No. 2 to Form S-4                         HTML  1,450K 
 2: EX-5.1      Ex-5.1: Opinion of Wayne A. Wirtz                   HTML      9K 
 3: EX-8.1      Ex-8.1: Opinion of Sullivan & Cromwell Llp          HTML      9K 
 4: EX-8.2      Ex-8.2: Opinion of Fried, Frank, Harris, Shriver &  HTML     14K 
                          Jacobson Llp                                           
 5: EX-23.1     Ex-23.1: Consent of Ernst & Young Llp               HTML      8K 
 6: EX-23.2     Ex-23.2: Consent of Pricewaterhousecoopers Llp      HTML      7K 
 7: EX-23.3     Ex-23.3: Consent of Ernst & Young Llp               HTML      7K 
 8: EX-23.4     Ex-23.4: Consent of Pricewaterhousecoopers Llp      HTML      7K 
 9: EX-23.5     Ex-23.5: Consent of Pricewaterhousecoopers Llp      HTML      7K 
10: EX-23.6     Ex-23.6: Consent of Pricewaterhousecoopers Llp      HTML      6K 
11: EX-99.1     Ex-99.1: Form of Proxy Card                         HTML     20K 
12: EX-99.2     Ex-99.2: Form of Proxy Card                         HTML     15K 
13: EX-99.7     Ex-99.7: Consent of Lehman Brothers Inc.            HTML      9K 
14: EX-99.9     Ex-99.9: Consent of Citigroup Global Markets Inc.   HTML      8K 
15: EX-99.10    Ex-99.10: Consent of Goldman, Sachs & Co.           HTML     10K 
16: EX-99.12    Ex-99.12: Consolidated Shareholders' Class Action   HTML     54K 
                          Complaint                                              


S-4/A   ·   Amendment No. 2 to Form S-4
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page
"Table of Contents
"Questions and Answers
"Summary
"The Companies
"The Merger
"Merger Consideration
"Recommendation of the AT&T Board of Directors
"Recommendation of the BellSouth Board of Directors
"Opinions of AT&T s Financial Advisors
"Opinions of BellSouth s Financial Advisors
"Treatment of BellSouth Stock Options and Stock-Based Awards
"Interests of BellSouth Executive Officers and Directors in the Merger
"Material United States Federal Income Tax Consequences
"Procedures for Exchange of BellSouth Common Shares for AT&T Common Shares
"Accounting Treatment
"Regulatory Matters Related to the Merger
"Completion of the Merger
"No Dissenters Rights
"The Merger Agreement
"Alternative Acquisition Proposals
"Conditions to Closing
"Termination of the Merger Agreement
"Effect of Termination; Termination Fees
"Recommendation
"Selected Historical Financial Data of AT&T Inc
"Selected Historical Financial Data of BellSouth
"Selected Unaudited Pro Forma Condensed Combined Financial Data as of and for the Quarter Ended March 31, 2006
"Unaudited Comparative Per Share Data for the Quarter Ended March 31, 2006
"Unaudited Comparative Per Share Data for the Year Ended December 31, 2005
"Comparative Market Data
"Comparative Per Share Market Price Data and Dividend Information
"Risk Factors
"Risk Factors Relating to the Merger
"Risk Factors Relating to AT&T Following the Merger
"BellSouth
"At&T
"Merger Sub
"Background of the Merger
"AT&T s Reasons for the Merger
"BellSouth s Reasons for the Merger
"Certain Financial Projections
"Unaudited Pro Forma Condensed Combined Financial Information as of and for the Quarter Ended March 31, 2006
"Financial Analyses of BellSouth s Financial Advisors
"Interests of BellSouth s Executive Officers and Directors in the Merger
"Merger Fees, Costs and Expenses
"Dissenters Rights
"Resale of AT&T Common Shares
"Repurchase of AT&T Common Shares
"New York Stock Exchange Listing; Delisting and Deregistration of BellSouth Common Shares
"Litigation Relating to the Merger
"Information About the AT&T Special Meeting
"General; Date; Time and Place
"Purpose of the AT&T Special Meeting
"Record Date; Voting Power
"Required Vote
"Recommendation of AT&T s Board of Directors
"Quorum
"How to Vote
"To Attend the AT&T Special Meeting
"Expenses of Solicitation
"Questions about Voting Your Shares
"Information About the BellSouth Special Meeting
"Purpose of the Special Meeting
"Recommendation of BellSouth s Board of Directors
"Householding
"To Attend the BellSouth Special Meeting
"Closing and Effectiveness of the Merger
"AT&T s Post-Closing Directors and Officers
"Representations and Warranties
"Covenants and Agreements
"Conditions to the Merger
"Effect of Termination
"Termination Fees and Expenses
"Amendment, Extension and Waiver
"Specific Performance
"Unaudited Pro Forma Condensed Combined Statement of Income for the Year Ended December 31, 2005
"New Directors and Management of AT&T Following the Merger
"Description of AT&T Capital Stock
"AT&T Common Shares
"AT&T Preferred Shares
"No Shareholder Rights Plan
"Comparison of Shareholder Rights
"Classes and Series of Capital Stock
"Annual Meeting of Shareholders
"Special Meetings of Shareholders
"Shareholder Action Without a Meeting
"Shareholder Nominations and Proposals
"Access to Corporate Records, Financial Statements and Related Matters
"Amendments of Organizational Documents
"By-Law Amendments
"Dividends
"Dissenters and Appraisal Rights
"Number and Qualification of Directors
"Filling Vacancies on the Board of Directors
"Removal of Directors
"Limitation of Personal Liability of Directors
"Indemnification of Directors and Officers
"Shareholder Rights Plan
"Vote on Mergers and Certain Other Transactions
"Anti-Takeover and Ownership Provisions
"Experts
"Legal Matters
"Shareholder Proposals
"Where You Can Find More Information
"Cautionary Statement Concerning Forward-Looking Statements
"Annex A
"Agreement and Plan of Merger among BellSouth Corporation, AT&T Inc. and ABC Consolidation Corp., dated as of March 4, 2006
"Selected Unaudited Pro Forma Condensed Combined Financial Data as of and for the Year Ended December 31, 2005
"Annex B
"Fairness Opinion of Lehman Brothers Inc
"Annex C
"Fairness Opinion of Evercore Group Inc
"Annex D
"Fairness Opinion of Citigroup Global Markets Inc
"Annex E
"Fairness Opinion of Goldman, Sachs & Co

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  S-4/A  

Table of Contents

As filed with the Securities and Exchange Commission on June 2, 2006
Registration No. 333-132904
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
Form S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AT&T INC.
(Exact Name of Registrant as Specified in Its Charter)
         
Delaware   4813   43-1301883
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (IRS Employer
Identification Number)
175 East Houston
San Antonio, Texas 78205
(210) 821-4105
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ann Effinger Meuleman
AT&T Inc.
175 East Houston
San Antonio, Texas 78205
(210) 821-4105
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
             
Joseph B. Frumkin, Esq.
Eric M. Krautheimer, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Tel: (212) 558-4000
Fax: (212) 558-3588
  Wayne A. Wirtz, Esq.
AT&T Inc.
175 East Houston
San Antonio, Texas 78205
Tel: (210) 821-4105
Fax: (210) 351-3467
  Stacey K. Geer, Esq.
BellSouth Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309
Tel: (404) 249-4445
Fax: (404) 249-4766
  Arthur Fleischer, Jr., Esq.
Philip Richter, Esq.
Fried, Frank, Harris,
Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Tel: (212) 859-8000
Fax: (212) 859-4000
      Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective and upon completion of the transactions described in the enclosed prospectus.
      If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.     o
      If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o
      If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o
      The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
 


Table of Contents

     
PROXY STATEMENT   PROXY STATEMENT
AND PROSPECTUS OF AT&T INC.   OF BELLSOUTH CORPORATION
 
Image -- (AT&T LOGO)   Image -- BELLSOUTH LOGO
June 2, 2006
Dear Shareholders:
     The boards of directors of AT&T and BellSouth have agreed to combine in a merger that will result in a more effective and efficient provider of wireless, broadband, video, voice, data and directory services. It will also put control of Cingular Wireless in one company. We are very excited about the prospects for the combined company.
     If the merger is completed, BellSouth shareholders will receive 1.325 AT&T common shares for each BellSouth common share held immediately prior to the merger.
     Based on the closing price of $27.99 per AT&T common share on the New York Stock Exchange on March 3, 2006, the last trading day before the public announcement of the merger, the 1.325 exchange ratio represented approximately $37.09 per BellSouth common share, a 17.9% premium over the closing price of the BellSouth common shares on the NYSE on March 3, 2006. Based on the closing price of $26.91 per AT&T common share on the NYSE on June 1, 2006, the latest practicable date before the printing of this joint proxy statement/prospectus, the total merger consideration was valued at approximately $35.66 per BellSouth common share. Because the number of AT&T common shares to be issued in exchange for each BellSouth common share is fixed, the actual value of the merger consideration that BellSouth shareholders will receive at the time of the merger for each BellSouth common share will depend on the price per AT&T common share at that time. Based on the estimated number of BellSouth common shares outstanding on the record date for the meetings, AT&T expects to issue approximately 2,400,000,000 AT&T common shares to BellSouth shareholders in the merger. Former BellSouth shareholders are expected to own approximately 38% of the AT&T common shares outstanding immediately after the merger. AT&T common shares are quoted on the NYSE under the symbol “T”. BellSouth common shares are quoted on the NYSE under the symbol “BLS”.
     Each company is holding a special meeting of shareholders in order to obtain the shareholder approvals necessary to complete the merger as more fully described in this joint proxy statement/ prospectus. The accompanying joint proxy statement/prospectus provides a detailed description of the proposed merger and the merger consideration. In addition, it provides you with important information regarding these meetings. We urge you to read the enclosed materials (and any documents incorporated by reference into this joint proxy statement/ prospectus) carefully. Please pay particular attention to the “Risk Factors” section beginning on page 17.
     We cannot complete the merger unless the shareholders of both of our companies approve proposals related to the merger. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend either special meeting, please vote all proxy cards that you receive as soon as possible to ensure that your shares are represented at the applicable special meeting. If you are a BellSouth shareholder, please note that a failure to vote your shares is the equivalent of a vote against the merger. If you are an AT&T shareholder, please note that a failure to vote your shares may result in an insufficient number of shares being voted at the AT&T special meeting for the proposal to issue AT&T common shares to be approved. Registered and many broker-managed shareholders can vote their shares by using a toll-free telephone number or the Internet. Instructions for using these convenient services are provided on the accompanying proxy card. Of course, you may still vote your shares by marking your votes on the accompanying proxy card, signing and dating it and mailing it in the envelope provided. If you sign and return your proxy card without specifying your choices, it will be understood that you wish to have your shares voted in accordance with your board of directors’ recommendations. If you are a shareholder of both AT&T and BellSouth, you will receive two separate packages of proxy materials. Please sign, date and return all proxy cards that you receive, whether from AT&T or BellSouth, or vote as either an AT&T or BellSouth shareholder by Internet or telephone. If you have any questions or need assistance voting your shares, please call D.F. King & Co., Inc., who is assisting AT&T, toll free at (800) 431-9643 or collect at (212) 269-5550, if you are an AT&T shareholder, or Morrow & Co., Inc., who is assisting BellSouth, toll free at (877) 366-1576, if you are a BellSouth shareholder.
     The AT&T board of directors recommends that AT&T shareholders vote “FOR” the proposal to authorize the issuance of AT&T common shares required to be issued to BellSouth shareholders pursuant to the merger agreement. The BellSouth board of directors recommends that BellSouth shareholders vote “FOR” the proposal to approve the merger agreement.
Sincerely,
     
Image -- -s- Edward E. Whitacre, Jr.
  Image -- -s- F. Duane Ackerman
 
  F. Duane Ackerman
Chairman of the Board and Chief Executive Officer
  Chairman of the Board and Chief Executive Officer
AT&T Inc. 
  BellSouth Corporation
     Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense.
     This joint proxy statement/prospectus is dated June 2, 2006 and is expected to be first mailed to AT&T’s shareholders on or about June 7, 2006 and to BellSouth’s shareholders on or about June 8, 2006.


Table of Contents

REFERENCE TO ADDITIONAL INFORMATION
      This joint proxy statement/ prospectus incorporates by reference important business and financial information about AT&T and BellSouth from documents that are not included in or delivered with this joint proxy statement/prospectus. For a listing of the documents incorporated by reference into this joint proxy statement/ prospectus, see “Where You Can Find More Information” beginning on page 136. This information is available to you without charge upon your written or oral request. You can obtain documents related to AT&T and BellSouth that are incorporated by reference into this joint proxy statement/ prospectus, without charge, from the SEC’s Web site (www.sec.gov) or by requesting them in writing or by telephone from the appropriate company.
     
AT&T Inc.
  BellSouth Corporation
175 East Houston
  1155 Peachtree Street, N.E., Room 14B06
  Atlanta, Georgia 30309
(210) 821-4105
  (404) 249-2000
Attn: Stockholder Services
  Attn: Investor Relations
  www.bellsouth.com/investor
      (All Web site addresses given in this joint proxy statement/ prospectus are for information only and are not intended to be an active link or to incorporate any Web site information into this joint proxy statement/ prospectus.)
      Please note that copies of the documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference into the documents or this joint proxy statement/ prospectus.
      In order to receive timely delivery of requested documents in advance of the special meetings, you should make your request no later than July 14, 2006.
ABOUT THIS DOCUMENT
      This document, which forms part of a registration statement on Form S-4 filed with the SEC by AT&T (File No. 333-132904), constitutes a prospectus of AT&T under Section 5 of the Securities Act of 1933, which we refer to as the Securities Act, with respect to the AT&T common shares to be issued to BellSouth shareholders as required by the merger agreement. This document also constitutes a joint proxy statement under Section 14(a) of the Securities Exchange Act of 1934, which we refer to as the Exchange Act. It also constitutes a notice of meeting with respect to the special meeting of AT&T shareholders, at which AT&T’s shareholders will be asked to consider and vote upon a proposal to authorize the issuance of AT&T common shares required to be issued to BellSouth shareholders pursuant to the merger agreement, and a notice of meeting with respect to the special meeting of BellSouth shareholders, at which BellSouth’s shareholders will be asked to consider and vote upon a proposal to approve the merger agreement.

ii



Table of Contents

Image -- (AT&T LOGO)
AT&T INC.
175 E. Houston
San Antonio, Texas 78205
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on Friday, July 21, 2006
 
To AT&T Shareholders:
      A special meeting of shareholders of AT&T Inc., a Delaware corporation (“AT&T”), will be held at 3:00 p.m. Central time on Friday, July 21, 2006, at the Charline McCombs Empire Theatre, 226 North St. Mary’s Street, San Antonio, Texas, for the following purposes:
  •  To consider and vote upon a proposal to authorize the issuance of AT&T common shares required to be issued in the merger of ABC Consolidation Corp., a Georgia corporation and a wholly-owned subsidiary of AT&T (“Merger Sub”), with and into BellSouth Corporation, a Georgia corporation, as contemplated by the Agreement and Plan of Merger, dated as of March 4, 2006, by and among BellSouth, AT&T and Merger Sub, as that agreement may be amended; and
 
  •  To conduct any other business as may properly come before the special meeting or any properly reconvened meeting following an adjournment or postponement of the special meeting.
      Holders of record of AT&T common shares at the close of business on June 1, 2006, are entitled to vote at the special meeting and any adjournment or postponement of the special meeting. A list of these shareholders will be available for inspection during business hours from July 7 through July 20, 2006, at 175 E. Houston, San Antonio, Texas, and will also be available at the special meeting.
      Your vote is very important. Your proxy is being solicited by the AT&T Board of Directors. The issuance of new shares of AT&T common shares must be authorized by the shareholders of AT&T in order for the merger to be completed.
  By Order of the AT&T Board of Directors.
  Ann Effinger Meuleman
  Vice President and Secretary
  AT&T Inc.
  June 2, 2006
IMPORTANT NOTICE
If you do not plan to attend the special meeting to vote your shares, please complete, date, sign and promptly mail the enclosed proxy card in the return envelope provided. No postage is necessary if mailed in the United States. Shareholders of record and many broker-managed shareholders may also give their proxy by telephone or through the Internet in accordance with the instructions accompanying the proxy card. Any person giving a proxy has the power to revoke it at any time, and shareholders who are present at the meeting may withdraw their proxies and vote in person.

iii



Table of Contents

Image -- (LOGO)
BellSouth Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on Friday, July 21, 2006
 
To BellSouth Shareholders:
      A special meeting of shareholders of BellSouth Corporation, a Georgia corporation (“BellSouth”), will be held at 11:00 a.m. Eastern time on Friday, July 21, 2006, at the Cobb Galleria Centre, 2 Galleria Parkway, Atlanta, Georgia 30339, for the following purposes:
  •  To consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of March 4, 2006, by and among BellSouth, AT&T Inc. and a wholly-owned subsidiary of AT&T, as that agreement may be amended; and
 
  •  To conduct any other business that may properly come before the special meeting or any properly reconvened meeting following an adjournment or postponement of the special meeting.
      Holders of record of BellSouth common shares at the close of business on June 1, 2006 are entitled to vote at the special meeting and any adjournment of the special meeting. Your shares can be voted at the special meeting only if you are present or represented by a valid proxy. Shareholders who owned BellSouth common shares as of the record date will be admitted to the special meeting with verification of ownership, such as an account statement or a valid admission card as attached to the proxy card.
      Your vote is important. Please vote as soon as possible in one of the following ways, even if you plan to attend the meeting:
  •  By Internet — visit the website on the proxy card or in your e-mail notice; or
 
  •  By telephone — use the toll-free telephone number on the proxy card; or
 
  •  By mail — mark, sign, date and promptly return the enclosed proxy card(s) in the postage-paid envelope.
      You may also submit a ballot at the special meeting on July 21, 2006.
      By Order of the BellSouth Board of Directors.
  Rebecca M. Dunn
  Senior Vice President — Corporate Compliance and
Corporate Secretary
  BellSouth Corporation
  June 2, 2006
IMPORTANT NOTICE
      For the merger agreement to be approved by BellSouth shareholders, a majority of the outstanding BellSouth common shares must be voted in favor of approval of the merger agreement. Accordingly, if you do not vote your BellSouth common shares, it will have the same effect as a vote against approval of the merger agreement and the merger. Please vote your shares.
      If you do not plan to attend the special meeting to vote your shares, please complete, date, sign and promptly mail the enclosed proxy card(s) in the return envelope provided. No postage is necessary if mailed in the United States. Shareholders of record and many broker-managed shareholders may also give their proxy by telephone or through the Internet in accordance with the instructions accompanying the proxy card(s). Any person giving a proxy has the power to revoke it at any time, and shareholders who are present at the meeting may withdraw their proxies and vote in person.
      Please do not send share certificates at this time. If the merger is completed, you will be sent instructions regarding the surrender of your share certificates.

iv



Table of Contents

 
TABLE OF CONTENTS
             
 Questions and Answers     vii  
 Summary     1  
 The Companies     1  
 The Merger     2  
 Merger Consideration     2  
 Recommendation of the AT&T Board of Directors     2  
 Recommendation of the BellSouth Board of Directors     3  
 Opinions of AT&T’s Financial Advisors     3  
 Opinions of BellSouth’s Financial Advisors     3  
 Treatment of BellSouth Stock Options and Stock-Based Awards     3  
 Interests of BellSouth Executive Officers and Directors in the Merger     4  
 Material United States Federal Income Tax Consequences     4  
 Procedures for Exchange of BellSouth Common Shares for AT&T Common Shares     4  
 Accounting Treatment     4  
 Regulatory Matters Related to the Merger     5  
 Completion of the Merger     5  
 No Dissenters’ Rights     5  
 The Merger Agreement     6  
 Alternative Acquisition Proposals     6  
 Conditions to Closing     6  
 Termination of the Merger Agreement     7  
 Effect of Termination; Termination Fees     8  
 Recommendation     9  
 Selected Historical Financial Data of AT&T Inc.      10  
 Selected Historical Financial Data of BellSouth     11  
 Selected Unaudited Pro Forma Condensed Combined Financial Data as of and for the Quarter Ended March 31, 2006     12  
 Selected Unaudited Pro Forma Condensed Combined Financial Data as of and for the Year Ended December 31, 2005     13  
 Unaudited Comparative Per Share Data for the Quarter Ended March 31, 2006     14  
 Unaudited Comparative Per Share Data for the Year Ended December 31, 2005     15  
 Comparative Market Data     16  
 Comparative Per Share Market Price Data and Dividend Information     16  
 Risk Factors     17  
 Risk Factors Relating to the Merger     17  
 Risk Factors Relating to AT&T Following the Merger     19  
 The Companies     24  
 BellSouth     24  
 AT&T     24  
 Merger Sub     24  
 The Merger     25  
 Background of the Merger     25  
 AT&T’s Reasons for the Merger     27  
 Recommendation of the AT&T Board of Directors     29  
 BellSouth’s Reasons for the Merger     29  
 Recommendation of the BellSouth Board of Directors     33  
 Certain Financial Projections     33  
 Opinions of AT&T’s Financial Advisors     36  
 Opinions of BellSouth’s Financial Advisors     47  
 Financial Analyses of BellSouth’s Financial Advisors     54  
 Interests of BellSouth’s Executive Officers and Directors in the Merger     58  
 Material United States Federal Income Tax Consequences     62  
 Accounting Treatment     64  
 Regulatory Matters Related to the Merger     65  
 Merger Fees, Costs and Expenses     66  
 Dissenters’ Rights     66  
 Resale of AT&T Common Shares     66  
 Repurchase of AT&T Common Shares     67  
 New York Stock Exchange Listing; Delisting and Deregistration of BellSouth Common Shares     67  
 Litigation Relating to the Merger     68  
 Information About the AT&T Special Meeting     69  
 General; Date; Time and Place     69  
 Purpose of the AT&T Special Meeting     69  
 Record Date; Voting Power     69  
 Required Vote     69  
 Recommendation of AT&T’s Board of Directors     70  
 Quorum     70  
 How to Vote     70  

v



Table of Contents

             
 To Attend the AT&T Special Meeting     71  
 Expenses of Solicitation     71  
 Questions about Voting Your Shares     71  
 Information About the BellSouth Special Meeting     72  
 General; Date; Time and Place     72  
 Purpose of the Special Meeting     72  
 Record Date; Voting Power     72  
 Required Vote     72  
 Recommendation of BellSouth’s Board of Directors     73  
 Quorum     73  
 How to Vote     73  
 Householding     74  
 To Attend the BellSouth Special Meeting     74  
 Expenses of Solicitation     75  
 Questions about Voting Your Shares     75  
 The Merger Agreement     76  
 The Merger     76  
 Closing and Effectiveness of the Merger     76  
 AT&T’s Post-Closing Directors and Officers     76  
 Merger Consideration     77  
 Representations and Warranties     78  
 Covenants and Agreements     79  
 Conditions to the Merger     91  
 Termination of the Merger Agreement     94  
 Effect of Termination     95  
 Termination Fees and Expenses     95  
 Amendment, Extension and Waiver     97  
 Specific Performance     97  
 Unaudited Pro Forma Condensed Combined Financial Information as of and for the Quarter Ended March 31, 2006     98  
 Unaudited Pro Forma Condensed Combined Statement of Income for the Year Ended December 31, 2005     109  
 New Directors and Management of AT&T Following the Merger     118  
 Description of AT&T Capital Stock     119  
 AT&T Common Shares     119  
 AT&T Preferred Shares     119  
 No Shareholder Rights Plan     119  
 Comparison of Shareholder Rights     120  
 Classes and Series of Capital Stock     120  
 Annual Meeting of Shareholders     120  
 Special Meetings of Shareholders     121  
 Shareholder Action Without a Meeting     122  
 Shareholder Nominations and Proposals     122  
 Access to Corporate Records, Financial Statements and Related Matters     124  
 Amendments of Organizational Documents     125  
 By-Law Amendments     125  
 Dividends     126  
 Dissenters’ and Appraisal Rights     126  
 Number and Qualification of Directors     127  
 Filling Vacancies on the Board of Directors     128  
 Removal of Directors     128  
 Limitation of Personal Liability of Directors     129  
 Indemnification of Directors and Officers     129  
 Shareholder Rights Plan     130  
 Vote on Mergers and Certain Other Transactions     131  
 Anti-Takeover and Ownership Provisions     132  
 Experts     135  
 Legal Matters     135  
 Shareholder Proposals     135  
 Where You Can Find More Information     136  
 Cautionary Statement Concerning Forward-Looking Statements     137  
 
   Agreement and Plan of Merger among BellSouth Corporation, AT&T Inc. and ABC Consolidation Corp., dated as of March 4, 2006     A-1  
   Fairness Opinion of Lehman Brothers Inc.      B-1  
   Fairness Opinion of Evercore Group Inc.      C-1  
   Fairness Opinion of Citigroup Global Markets Inc.      D-1  
   Fairness Opinion of Goldman, Sachs & Co.      E-1  
 EX-5.1: OPINION OF WAYNE A. WIRTZ
 EX-8.1: OPINION OF SULLIVAN & CROMWELL LLP
 EX-8.2: OPINION OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP
 EX-23.1: CONSENT OF ERNST & YOUNG LLP
 EX-23.2: CONSENT OF PRICEWATERHOUSECOOPERS LLP
 EX-23.3: CONSENT OF ERNST & YOUNG LLP
 EX-23.4: CONSENT OF PRICEWATERHOUSECOOPERS LLP
 EX-23.5: CONSENT OF PRICEWATERHOUSECOOPERS LLP
 EX-23.6: CONSENT OF PRICEWATERHOUSECOOPERS LLP
 EX-99.1: FORM OF PROXY CARD
 EX-99.2: FORM OF PROXY CARD
 EX-99.7: CONSENT OF LEHMAN BROTHERS INC.
 EX-99.9: CONSENT OF CITIGROUP GLOBAL MARKETS INC.
 EX-99.10: CONSENT OF GOLDMAN, SACHS & CO.
 EX-99.12: CONSOLIDATED SHAREHOLDERS' CLASS ACTION COMPLAINT

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QUESTIONS AND ANSWERS
      The following are some of the questions that you, as a shareholder of AT&T or BellSouth, may have, and answers to those questions. These questions and answers, as well as the following summary, are not meant to be a substitute for the information contained in the remainder of this joint proxy statement/prospectus, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this joint proxy statement/prospectus. We urge you to read this joint proxy statement/prospectus in its entirety prior to making any decision.
Q1: Why am I receiving this joint proxy statement/prospectus?
 
A1: AT&T and BellSouth have agreed to combine their respective businesses by means of a merger. We expect the combined company will be a more effective and efficient provider in the wireless, broadband, video, voice and data markets. It will also put control of Cingular Wireless in one company.
 
AT&T is holding a special meeting of shareholders in order to obtain the shareholder approval necessary to issue AT&T common shares in the merger, as described in this joint proxy statement/prospectus. BellSouth is holding a special meeting of shareholders in order to obtain shareholder approval of the merger agreement, as described in this joint proxy statement/prospectus.
 
We will be unable to complete the merger unless AT&T and BellSouth shareholders approve these proposals at their respective special meetings.
 
We have included in this joint proxy statement/prospectus important information about the merger, the merger agreement and the special meetings of the shareholders of AT&T and BellSouth. You should read this information carefully and in its entirety. We have attached a copy of the merger agreement as Annex A. The enclosed voting materials allow you to vote your shares without attending the applicable special meeting. Your vote is very important and we encourage you to vote your proxy as soon as possible.
 
Q2: What will I receive in the merger?
 
A2: If the merger is completed, BellSouth shareholders will receive 1.325 AT&T common shares for each BellSouth common share held immediately prior to the merger.
 
Holders of BellSouth common shares will not receive any fractional AT&T common shares in the merger. Instead, the total number of AT&T common shares that each BellSouth shareholder will receive in the merger will be rounded down to the nearest whole number, and AT&T will pay cash for the remaining fractional AT&T common share that a BellSouth shareholder would otherwise be entitled to receive. The amount of cash payable for a fractional AT&T common share will be determined by multiplying the fraction by the average closing price for an AT&T common share for the five trading days ending on the trading day immediately prior to the completion of the merger.
 
AT&T shareholders will continue to hold their AT&T common shares.
 
Q3: How do I calculate the value of the merger consideration?
 
A3: BellSouth shareholders will receive merger consideration consisting of a fixed number of 1.325 AT&T common shares for each BellSouth common share they own. Based on the closing price of $27.99 per AT&T common share on the New York Stock Exchange, which we refer to as the NYSE, on March 3, 2006, the last trading day before the public announcement of the merger, the exchange ratio represented approximately $37.09 per BellSouth common share, a 17.9% premium over the closing price of BellSouth common shares on the NYSE on March 3, 2006. Based on the closing price of $26.91 per share of AT&T common shares on the NYSE on June 1, 2006, the latest practicable date before the printing of this joint proxy statement/prospectus, the exchange ratio represented approximately $35.66 per BellSouth common share.
 
Because AT&T will issue a fixed number of AT&T common shares in exchange for each BellSouth common share, the value of the merger consideration that BellSouth shareholders will receive in the merger for each BellSouth common share will depend on the price per AT&T common share at the

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time the merger is completed. That price will not be known at the time of the meeting and may be less than the current price or the price at the time of the meeting. Former BellSouth shareholders are currently expected to own approximately 38% of the AT&T common shares outstanding immediately after the merger.
 
Q4: What is required to complete the merger?
 
A4: We are not required to complete the merger unless a number of conditions are satisfied or waived. These conditions include receipt of shareholder approvals, receipt of the approval of the Federal Communications Commission, which we refer to as the FCC, and other regulatory consents, expiration of the waiting period under the Hart-Scott-Rodino Act, which we refer to as the HSR Act, and receipt of legal opinions that the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see “The Merger Agreement — Conditions to the Merger” beginning on page 91.
 
Q5: When and where will the special meetings be held?
 
A5: The AT&T special meeting is scheduled to be held at 3:00 p.m. Central time, at the Charline McCombs Empire Theatre, 226 North St. Mary’s Street, San Antonio, Texas, on July 21, 2006. The BellSouth special meeting is scheduled to be held at 11:00 a.m. Eastern time at the Cobb Galleria Centre, 2 Galleria Parkway, Atlanta, Georgia, on July 21, 2006.
 
Q6: Who is entitled to vote at the AT&T and BellSouth special meetings?
 
A6: AT&T has fixed June 1, 2006 as the record date for the AT&T special meeting. If you were an AT&T shareholder at the close of business on the record date, you are entitled to vote on matters that come before the AT&T special meeting. However, an AT&T shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the AT&T special meeting.
 
BellSouth has fixed June 1, 2006 as the record date for the BellSouth special meeting. If you were a BellSouth shareholder at the close of business on the record date, you are entitled to vote on matters that come before the BellSouth special meeting. However, a BellSouth shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the BellSouth special meeting.

Q7: I hold my shares in “street name”.  How are my shares voted?
 
A7: If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this joint proxy statement/ prospectus has been forwarded to you by your brokerage firm, bank or other nominee, or their agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide your broker, bank or other nominee with instructions on how to vote your “street name” shares, your broker, bank or other nominee will not be permitted to vote them on either the proposal to authorize the issuance of AT&T common shares in the merger if you are an AT&T shareholder or the proposal to approve the merger agreement if you are a BellSouth shareholder. You should therefore be sure to provide your broker, bank or other nominee with instructions on how to vote your shares.
Q8: How do I vote?
 
A8: If you are entitled to vote at your company’s special meeting, you can vote in person by completing a ballot at the special meeting, or you can vote by proxy before the special meeting. Even if you plan to attend your company’s special meeting, we encourage you to vote your shares by proxy as soon as possible. After carefully reading and considering the information contained in this joint proxy statement/ prospectus, please submit your proxy by telephone or Internet in accordance with the instructions set forth on the enclosed proxy card, or fill out, sign and date the proxy card, and then mail your signed proxy card in the enclosed envelope as soon as possible so that your shares may be voted at your company’s special meeting. For detailed information, please see “Information About the AT&T Special Meeting — How to Vote” beginning on page 70 and “Information About the BellSouth Special Meeting — How to Vote” beginning on page 73. The vote required to approve the