AT&T on Monday unveiled a three-year strategic plan that included adding two new board members, selling off up to $10 billion worth of non-core businesses next year and paying off all its debt from the purchase of Time Warner, 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 through at least 2020.
The plan "benefited from our engagement with our owners, including Elliott Management," Stephenson said in a statement.
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.
A source familiar with the matter said Monday that Elliott is supportive of the board member AT&T is expected to nominate this year at the next board meeting.
To reduce its debt pile of $153.5 billion at the end of the third quarter, 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.
One such sale was announced over the weekend. Investment group PPF, owned by the Czech Republic's wealthiest businessman, Petr Kellner, has agreed to buy broadcaster Central European Media Enterprises (CME) in a cash deal valued at about $2.1 billion, marking the exit of AT&T, CME's largest shareholder.
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.
AT&T added 101,000 net new phone subscribers who pay a monthly bill during the third quarter. Wall Street estimated the carrier would gain 61,000 net new customer additions, according to a note from Cowen analysts.
Shares of AT&T were up slightly at $37.50 in trading before the bell.