UPDATED: Verizon to Acquire Alltel In $28 Billion Deal

by Lance Turner and Jamie Walden  on Thursday, Jun. 5, 2008 10:25 am  

Verizon says it will buy Alltel Corp. of Little Rock.

Verizon's intention to buy Alltel comes six months after two private investment firms, TPG Capital and Goldman Sachs Capital Partners, finalized in November its purchase of Alltel a $27.5 billion deal, by far the biggest deal in Arkansas in 2007.

Alltel stockholders received $71.50 per share in the deal - a 22.6 percent premium over the stock price when the rumors of a sale started the in December 2006.

Alltel's management has remained mostly in place since the deal. Ford has remained CEO of the wireless firm, and the company's headquarters has remained in Little Rock.

In its story, CNBC said its sources told the network that TPG and Goldman are "willing to sell only six months after they closed the deal because they'll get a slight premium to their equity investment, and there is a broad desire within private equity these days to generate a return when one is available.

"While the premium for the equity may be slight, given the enormous leverage in the deal, the returns would seem to be good ones for TPG and Goldman."

Verizon Wireless, a joint venture of Vodafone Group and Verizon Communications Inc., is the nation's second-largest wireless firm, behind AT&T Inc. Verizon and Alltel use the same technology, CDMA, for their respective wireless networks.

Alltel recently reported a first-quarter loss due primarily to costs related to its merger with the two private equity firms in November. Alltel posted a first-quarter net loss of $124.9 million, compared with a profit of $230.1 million a year ago.

 

 

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