GTE Faced Choice of Power or Premium In Fashioning Its 'Merger of Equals'
Money or power?</br></br>In the spate of megadeals announced this year, ranging from banking to pharmaceutical deals, there has been a common theme: The smaller company gets either a premium price or its chief executive officer gets broad power-sharing arrangements in the combined company. But not both.</br></br>As GTE Corp. investors found out this week, their company's executives got power, but shareholders got no premium in the $52.55 billion merger accord with Bell Atlantic Corp.</br></br>GTE's shares, which closed Friday at $57.9375, are down 8.4% since news broke that it would accept a stock valuation that was below where its shares were trading. The 1.22 shares of Bell Atlantic that GTE shareholders will receive for each GTE share were valued at $55.13 as of Monday morning, and $54.06 as of the close of trading yesterday.</br></br>Yesterday, GTE shares closed at $53.0625, down $2.6875, in New York Stock Exchange composite trading, and Bell Atlantic closed at $44.3125, down 68.75 cents.