AT&T Denies Racial Bias vs. Black-Owned Equity Firm That Tried Buying Cricket

AT&T denies the allegations it barred Legacy Equity Advisors from acquiring divested AT&T assets like Cricket Wireless and DirecTV because the private equity firm is African American-owned and -operated (see 2305040065), emailed an AT&T spokesperson Thursday. AT&T “will vigorously defend ourselves in court,” said the spokesperson: “We do not discriminate, nor do we tolerate discrimination of any kind, and any suggestion that we do is just wrong.”

Legacy’s complaint Thursday in U.S. District Court for Northern Texas in Dallas asserted the private equity firm made AT&T a $4.6 billion bid in March 2019 for a majority stake in Cricket Wireless, and that it had “the capital, management team and strategy in place” to complete the deal. The complaint said then-AT&T CEO Randall Stephenson rejected the bid after former AT&T Senior Vice President Steve McGaw told Legacy Managing Partner Marcellus Taylor “he had no confidence that an African American firm like Legacy could successfully raise the capital necessary to acquire billion-dollar assets.”

McGaw left AT&T in September, and has been an external adviser to Bain & Co. since February, per his LinkedIn profile. Legacy’s complaint cited financial backing from Bain as contributing to Legacy’s $4.6 billion bid to buy Cricket Wireless. Efforts to reach McGaw Friday for comment on Legacy’s complaint were unsuccessful.

Racial bias also contributed to AT&T never giving Legacy the opportunity to bid on DirecTV, alleged the complaint. Legacy did agree to pursue AT&T’s offer to acquire the retail stores it was divesting, though it only gave Legacy the opportunity to bid on 88 stores of the hundreds that would be available, it said: “This offer was a sham.”

Legacy’s Taylor participated in multiple conference calls with AT&T executive Chris Cass to close Legacy’s $31 million buyout of the 88 stores, said the complaint. In one call, Cass, like McGaw earlier, told Taylor he had no confidence African American equity firms like Legacy had the ability to raise the necessary financing, it said. Cass, AT&T senior executive director-corporate development, didn’t respond to emails Friday seeking comment.

AT&T ultimately sold the 88 stores to Blue Link Wireless, a company formed by former CEO Stephenson after he left AT&T, said the complaint. Despite Taylor’s “qualifications, expertise and financial resources,” AT&T sold the 88 stores “on more favorable terms to Mr. Stephenson and his white-owned Blue Link Wireless company,” it said.