By Madlin Mekelburg
(Source Bloomberg):
(BLOOMBERG) — A Black-owned private equity firm accused AT&T Inc. of discrimination for rejecting a $4.6 billion bid in 2019 for a majority stake in the Cricket Wireless business.
Legacy Equity Advisors — owned by former Aldus Equity LLC partner Marcellus Taylor — claimed in a lawsuit filed Thursday in Dallas that AT&T rejected the Cricket offer and denied the firm opportunities to bid on 13 other available assets in subsequent years. Instead, AT&T solicited bids from less qualified white-owned firms, according to the suit.
“To secure a competitive bidding price for these assets, any reasonable, non-racist company in AT&T’s position would have allowed a firm like Legacy to participate in the bidding process,” Legacy’s lawyers said in the lawsuit. “Legacy’s money is as good and green as anyone else’s.”
During these attempts to acquire AT&T assets, executives at the telecommunications giant repeatedly raised doubts about “the ability of African American-owned firms like Legacy to secure adequate financing to close transactions,” according to the suit.
A spokesperson for AT&T said the company denies the allegations raised in the lawsuit.
“We do not discriminate, nor do we tolerate discrimination of any kind, and any suggestion that we do is just wrong,” they said in a statement.
To acquire Cricket, Taylor had arranged for financial backing from Dallas investor Tom Hicks, investment firm Bain Capital and Roc Nation, Jay-Z’s entertainment agency, according to the lawsuit. Taylor met with AT&T Chief Financial Officer John Stephens on March 25, 2019, and made the offer.
Black Consumers
Legacy said its investment strategy targets markets for African Americans and Hispanics, who were the bulk of Cricket’s customers. AT&T’s marketing strategy had “failed to connect with these groups,” and the brand “wasn’t reaching its potential,” Legacy said in its complaint.
AT&T rejected the Legacy offer for Cricket. AT&T later agreed to a $31 million bid from Taylor’s firm to acquire 88 retail stores, but the lawsuit claims that “this offer was a sham.”
Officials at AT&T told Taylor he had to take possession of the stores during the busy holiday season and did not have the right to hire existing store employees, conditions his lawyers argue were “designed to block Legacy’s acquisition of the stores.” The acquisition was not completed, according to the lawsuit.
Taylor told executives at AT&T that he wanted to bid on future assets the company planned to divest, but he was not invited to bid on DirecTV, the company’s Puerto Rico wireless division or AT&T locations in Detroit and Miami Beach, amon
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