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AT&T dumps Cablevision shares

AT&T Corp. has reportedly raised about $1.3 billion before taxes from two offerings, allowing it to dispose of most of its holdings in Cablevision Systems Corp.

Reuters reports AT&T, in the midst of a massive restructuring to split its main businesses into separate companies, said Thursday it will use proceeds from the offerings to cut debt. New York-based AT&T raised about $690 million from a secondary offering of 19.15 million Class A shares of Cablevision NY Group at $36.05 each.

It also raised about $844 million from an offering of 23.41 million shares of preferred stock automatically convertible into Cablevision NY Group shares in three years.

The convertible securities, known as ``participating equity preferred stock'' or ``PEPS,'' carried a 6.5 percent dividend, and are convertible into Cablevision stock at $43.98, a 22 percent premium over the shares' Wednesday closing price on the New York Stock Exchange. A 6.5 percent to 7 percent dividend and 18 to 22 percent premium were expected.

AT&T said if underwriters exercised an option, it may raise an additional $200 million, allowing it to dispose of its entire stake of 48.9 million shares in Cablevision. It inherited the shares two years ago when it bought cable TV operator Tele-Communications Inc.