Alltel Corporation (NYSE:AT) shares moved up $4.70, or 7.21%, to $69.91 today after the company received a $27.5 billion buyout offer from TPG Capital and Goldman Sachs Capital Partners. The $71.50 buyout comes after speculation that we recently noted in our article All Eyes on an Alltel Buyout. The premium represents a 9.6% premium to Friday's close and a 23% premium to the stock's price before buyout speculation first began in late December.

This price is likely to be viewed by shareholders as too low given the high premiums seen in other recent buyouts. Over the last six months, Alltel shares are up 15% while competitors Verizon and AT&T moved up 20% and 25%, respectively. In fact, even after the buyout Alltel shares will only be up 4% over the past 52 weeks! And finally, Alltel's strong cash flows and unique market position give it a very competitive stance as the 5th largest wireless provider in the United States.

So, is the buyout too small? Well, it is worth noting that Alltel's valuation before the buyout rumors was already significantly higher than its peers. The company's PEG (PE/Growth) ratio stands at a high 2.90 while it trades at just about enterprise value. In the end, it is uncertain whether or not the company will receive a higher bid, but AT is definitely a stock to watch in the meantime!

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