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AT&T bows to pressure from activist investor Elliott, CEO will stay on through 2020

AT&T bows to pressure from activist investor Elliott, CEO will stay on through 2020

AT&T said on Monday it would add two new board members and consider selling off up to $10 billion worth of non-core businesses next year, bowing to pressure from activist investor Elliott Management.

Elliott, which revealed a $3.2 billion stake in the company in September, has been pressing the telecommunications giant to cut costs, make management changes and scale back expansion aspirations. The two sides have held discussions, Reuters reported earlier this month.

The company also said that it expects Randall Stephenson to remain chief executive officer through at least 2020.

However, in a letter to shareholders supporting the plan, Elliott Management said AT&T would evaluate all potential CEO candidates and separate the role of Chairman and CEO.

"We commend AT&T for the positive steps announced today, which will create substantial and enduring shareholder value at one of America's greatest companies," Elliott said in a statement.

To reduce its debt pile of $158 billion as of June 30, AT&T has been on a selling spree and has recently sold its assets in Puerto Rico to Liberty Latin America for $1.95 billion.

The company expects generate $14 billion through asset sales and other initiatives by the end of this year. It reduced its net debt by $12.7 billion so far this year.

Total operating revenue in the third quarter ended Sept. 30 fell to $44.59 billion from $45.74 billion, a year earlier. Analysts were expecting about $45 billion, according to IBES data from Refinitiv.

Excluding items, AT&T earned 94 cents per share, above analysts' estimates of 93 cents.