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The Kelsey Report® Advisory

The ‘New’ AT&T; Yellow Pages
Charles Laughlin, Neal Polachek , 3/6/2006

SUMMARY: AT&T announced over the weekend that it plans to acquire BellSouth for an estimated US$67 billion. Like most telecom consolidations, this deal is not being driven by the directory divisions within the two companies, but the Yellow Pages businesses within each would be profoundly affected. If it goes through, this merger will create a Yellow Pages organization with total revenues of roughly US$5.8 billion, an EBITDA margin of 52 percent (before any synergies are taken into account), about 3,800 sales representatives and a presence in 21 states. The Kelsey Group believes the merger of the two parent companies is only step one as far as the directory business is concerned. Sooner or later, we would expect the newly enlarged AT&T to sell or spin off the directory unit in a deal that could conceivably be valued as high as US$30 billion.

Copyright © 2006 The Kelsey Group. All Rights Reserved.
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Copyright© 2006 The Kelsey Group. All Rights Reserved.