LITTLE ROCK, Ark. -(Dow Jones)- Alltel Corp. (AT) agreed to purchase Western Wireless Corp. (WWCA) for about $6 billion to create additional scale and scope.
The Wall Street Journal reported earlier Monday that Alltel was close to acquiring the largely rural cellphone company.
In a press release Monday, Alltel said each Western Wireless share will be exchanged for 0.535 Alltel shares and $9.25 in cash.
Western Wireless shareholders will have the ability to make an all-stock or all-cash election, subject to proration.
Alltel will issue about 60 million shares and pay about $1 billion in cash to purchase Western Wireless, Bellevue, Wash. Alltel will also assume debt of $1.5 billion.
Communications company Alltel expects the acquisition to add to earnings in 2006.
Analysts surveyed by Thomson First Call produced an average earnings view of $3.62 for the company's 2006, according to a survey of six analysts.
For 2003, Alltel earned $4.25 a share and reported income from continuing operations of $3.05 a share, exclduing items.
Alltel expects to gain about 1.4 million wireless customers in 19 western and midwestern states from the deal, giving it 10 million domestic wireless customers in 33 states.
The deal, subject to Western Wireless shareholder and regulatory approval, should close by mid-2005.
Alltel expects the combination will build a stronger wireless presence in its retail and wholesale operations.
Alltel President and Chief Executive Scott Ford said in a statement, "The domestic properties of Western Wireless are contiguous to Alltel's existing operations and create additional wireless scale and scope in attractive and complementary markets."
Western Wireless Chairman and Chief Executive John Stanton agreed to serve on Alltel's board.
The companies plans to hold a Webcast starting at 9 a.m. EST.
Company Web sites: http://www.alltel.com and http://www.wwireless.com
-Eamon Beltran; Dow Jones Newswires; 201-938-5400; AskNewswires@dowjones.com
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Posted to the site on 10th January 2005
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