Alltel Corporation
(NYSE:AT) shares moved up $1.29, or 1.98%, to $66.49 today after a Wall
Street Journal report added to long-standing rumors that the company
could be a buyout target by Verizon, Spint-Nextel or several private
equity buyout firms. The report marks the second time the WSJ reported
that private equity was circling the company - the first was back in
December of this year. Now, the newspaper insists that the firms are
closing in on a deal.
The company has more than 12 million
subscribers, which makes it the fifth largest mobile phone provider.
The company also consistently ranks higher on consumer evaluation polls
and has outpaced its competitors when it comes to rolling out new
features and services. The company also has many roaming agreements
with several other large carriers, which is a great bargaining chip for
any potential suitors. Finally, given the company's low debt and strong
balance sheet, a substantial amount of debt could be used in the event
of a leveraged buyout.
The WSJ noted that three separate groups
of private equity buyers have been formed to evaluate a takeover of
Alltel. The groups are: Blackstone Group and Providence Equity
Partners; TPG Capital and Goldman Sachs; and Carlyle Group and KKR.
Many analysts believe that the private equity firms were simply
interested in holding and operating the company until a mobile phone
carrier appeared ready to bid for the company. This makes AT a company
worth watching!
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