GTE Corp’s chairman and chief executive, Theodore Brophy, is being pressed to spin off the 50%-owned US Sprint Communications long-distance telephone operation to shareholders in a letter sent to him by Canadian investor Samuel Belzberg – but the Stamford, Connecticut telecommunications company has firmly rebuffed the suggestion. Belzberg urged a divestment, saying that it would give a lift to the company’s stock price, bolster profits, and add to shareholder value. Belzberg is the chairman and chief executive of First City Financial Corp of Vancouver, British Columbia, which is 67%-owned by the Belzberg family; First City recently announced that it had acquired a significant holding – but less than 5% – of GTE. Although Belzberg did not make any reference to his plans should GTE ignore his advice, he did reiterate his opinion that the overall structure of GTE should be re-evaluated. He reassured Brophy that First City does not intend to take part in a greenmail buy of GTE stock at a price above the market valuation. Belzberg also attacked GTE’s efforts to protect itself against an unwanted takeover attempt by describing anti-takeover efforts as measures designed to further insulate GTE from its responsibilities to stock owners. In November, GTE authorised a stock buiback program and raised its dividend to fight raiders. Despite Belzberg’s strictures, the measures were approved by GTE’s shareholders on Christmas Eve.
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