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SECURITIES AND EXCHANGE COMMISSION
8-K
CURRENT REPORT
Pursuant to Section 13 ot 15 (d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported) October 23, 1996
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TELEPORT COMMUNICATIONS GROUP INC.
(Exact Name of Registrant as specified in its Charter)
Delaware 0-20913 13-3173139
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(State or Other jurisdiction of (Commission (IRS Employer of
Incorporation) File Number) Identification No.)
One Teleport Drive, Staten Island, New York 10311
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code (718) 355-2000
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ITEM 5. OTHER EVENTS
The Registrant issued the following Press Release on October 23, 1996:
TCG TO ACQUIRE EASTERN TELELOGIC CORPORATION, PHILADELPHIA'S LARGEST
COMPETITIVE LOCAL CARRIER, AND COMPLETE ITS NORTHEAST CORRIDOR EXPANSION
FOR IMMEDIATE RELEASE
NEW YORK, NY -- Comcast Corp. and Teleport Communications Group Inc. (TCG)
today announced agreement to undertake a two-step transaction that, when
completed, will result in TCG acquiring Eastern Telelogic Corporation (ETC), the
leading competitive Local Exchange Carrier in Philadelphia, the nation's fifth
largest telecommunications market, as well as in the neighboring cities of
Camden, NJ and Wilmington, DE.
The acquisition is expected to total approximately $233 million and involve
a combination of cash, stock and assumption of debt.
"A few years ago, we recognized that ETC occupied a strategic position in
the densely populated Northeast Corridor and so we purchased a 25 percent stake
in the company," said Bob Annunziata, Chairman, President and CEO of TCG. "Our
acquisition of the remaining 75 percent of ETC underscores our basic growth
strategy: we'll either build our own networks or develop a relationship with
another company that leads to its acquisition by TCG."
With the acquisition of ETC, TCG will operate extensive local fiber optic
networks throughout the Northeast Corridor, from the northern Virginia suburbs
of Washington DC through New York, Boston and into southern New Hampshire.
ETC is an authorized competitive local exchange carrier in Pennsylvania,
New Jersey and Delaware. The company operates a Class 5 digital telephone switch
on its 525- mile fiber optic network which connects to more than 360 buildings
and provides a full array of private line and switched local exchange services
to businesses in the Philadelphia-Wilmington-Camden metropolitan area. ETC
currently has 140 employees.
TCG TO ACQUIRE ETC
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Annunziata added that "ETC's position as the leading provider of
competitive local telecommunications services in the Philadelphia, Wilmington
and Camden metropolitan area fits in with TCG's strategy of being the leading
local telecommunications competitor in all the major markets in the United
States. The acquisition of ETC will raise to 57 the number of major markets
served by TCG, including 18 of the nation's top 20."
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In the first of the two steps, ETC will redeem the shares of its stock,
approximately 49 percent, not held by Comcast CAP, a corporation owned 51
percent by Comcast Corporation and 49 percent by TCG. Comcast CAP will borrow
at a market interest rate approximately $120 million from TCG as a short-term
loan and will, in turn, lend this amount to ETC for the redemption. This first
step is expected to close as soon as mid-November.
In the second step, TCG will acquire Comcast's 51 percent of Comcast CAP in
exchange for 2,757, 083 shares of TCG Class A Common Stock, resulting in ETC
becoming a wholly owned subsidiary of TCG. TCG will also assume approximately
$45 million of ETC debt and $5 million of management appreciation rights. The
second transaction will close as soon as necessary regulatory approvals have
been obtained, which is expected in the first quarter of 1997.
Gary Lasher, President and CEO of ETC, said that "TCG is well recognized
throughout the industry as the largest, most successful and best managed"
competitive local exchange carrier. "TCG started the industry and it has
continued to lead it," he added. "We share TCG's entrepreneurial tradition and
philosophy of providing our customers with great service at competitive prices.
We are looking forward to becoming part of this highly successful and growing
organization."
TCG is the nation's oldest and largest competitive local exchange carrier,
serving information-intensive businesses in 57 major markets nationwide with an
array of advanced private line and switched telecommunications services.
Headquartered in New York, TCG is traded on the NASDAQ National Market under the
trading symbol: TCGI.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
TELEPORT COMMUNICATIONS
GROUP INC.
Dated: October 24, 1996
By: /s/ John A. Scarpati
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Name: John A. Scarpati
Title: Senior Vice President and Chief Financial
Officer
Dated: October 24, 1996 By: /s/ Maria Terranova-Evans
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Name: Maria Terranova-Evans
Title: Vice President and Controller
(Principal Accounting Officer)
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