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Little Rock-based Alltell Corp., the country's fifth-largest wireless operator by subscribers, is accelerating its effort to sell itself to another carrier. AT&T has responded to Alltell's overtures with interest, but also with concern over possible antitrust problems and worries over technology integration. Alltel's $22 billion market capitalization, which continues to rise on takeover speculation, is also a concern to potential buyers. Sprint Nextel has held talks with Alltell, but a transaction is not considered likely before Sprint completes the integration of its own 2005 merger. Alltell CEO Scott Ford says the company is reviewing "a wide span of options" about "all aspects of potential value creation from balance sheet restructuring to strategic alternatives to operations opportunities." Those options might include payment of a hefty one-time dividend, a stock buyback, or a redraft of network-sharing agreements with other companies. Alltell's attempts to initiate talks might be attributable to a pending U.S. government auction for radio spectrum, the terms of which preclude participating carriers from communicating with one another. Alltell recently posted better-than-expected Q4 results, adding 228,000 subscribers and generating earnings of $216 million.

Sources: Wall Street Journal, Reuters
Commentary: Verizon Wireless To Swallow Alltel Corp?Alltel Still A Pricey Buy. Conference call transcript: Q4 2006
Stocks/ETFs to watch: Alltel Corp. (AT), AT&T Inc. (T), Sprint Nextel Corp. (S), Verizon Communications Inc. (VZ). ETFs: Vanguard Telecom Services ETF (VOX), Telecom HOLDRs (TTH)

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Source: Alltell Courting Potential Buyers