Alltel's Ford: Deal Is About Shareholder Value

by James Gordon  on Monday, May. 21, 2007 3:51 pm  

Scott Ford, CEO of Alltel Corp. of Little Rock, says Alltel's deal to be purchased by two private equity groups is all about delivering value to shareholders.

Audio: Click here to listen to the complete news conference. It lasts about 19 minutes (36.4 MB).

Scott Ford, CEO of Alltel Corp. of Little Rock, said at a news conference on Monday that Alltel's deal to be purchased by two private equity groups is all about delivering value to shareholders.
“The process that we have just concluded was designed for that purpose and only that purpose,” Ford said.
Ford spoke to the press after the wireless firm's announcement late Sunday night that it had signed a merger agreement with Texas Pacific Group and Goldman Sachs Capital Partners for about $27.5 billion.
Meanwhile, shares of Alltel (NYSE: %%AT%%) finished the day up 7 percent on word of the buyout. After hours, the stock was trading up $4.45 to $69.66 per share.
With Alltel agreeing to a buying price of $71.50 a share, investors in the wireless carrier will enjoy a 10 percent premium over Alltel’s closing price on Friday and about a 23 percent premium over the price at which stock was trading before buyout speculation kicked-off in December.
“I don’t think anybody thought we’d get 70-plus dollars a share,” Ford said, later adding that he didn’t think Alltel would have ever seen a share price of $71.50 during his career.
Ford said Alltel had been in touch with most of its large shareholders Monday and that “they are delighted.” When asked specifically about opinion of Alltel’s largest institutional shareholder, Private Capital Management, he said he couldn’t comment on any specific shareholders views.
Private Capital Management, which controlled 28.5 million shares as of its most recent filing on May 15, didn’t return a call before press time.
After taking care of shareholders, Ford said Alltel made sure the transaction would be good for its employees. Ford said that TPG and GS have bought Alltel as a platform to grow into the wireless industry, not to break it up and sell it.
“This is a group of investors that want to invest in the wireless business. They want to grow the wireless business. They are committed to both the urban markets and the rural markets that we serve... We will continue to invest in our business as we have in the past,” he said.
For employee shareholders, Ford said, this is a win-win: “If you are a shareholder employee, you get paid and you get to keep your job.”
Alltel couldn’t confirm how many employees own company stock but said all employees have the option to purchase shares of Alltel through the company's 401(K) plan and employee stock program.
Ford also said, as part of the contract, TPG and GS had agreed to a “goodwill offering” in the form of money to ease employees through the transition.
Ford also said that Alltel’s senior management was not involved in negotiations regarding management's future at the firm. He said that once Alltel’s board approved the deal, he and the senior management team were asked to remain with the company.
“We ran a very fair and full process designed solely to deliver maximum shareholder value. There was no deal. There is no deal with the senior management team. That’s very different than most [private equity deals],” Ford said.

More on Alltel:
Catch Arkansas Business Publisher Jeff Hankins discussing the Alltel deal and what it means at 5 and 6 p.m. on KTHV-TV, Channel 11.

 

 

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