ALLTEL to Purchase Western Wireless in $6 Billion Transaction
January 10 2005 - 6:00AM
PR Newswire (US)
ALLTEL to Purchase Western Wireless in $6 Billion Transaction -
Company Bolsters Position as Leading Regional Provider LITTLE ROCK,
Ark., and BELLEVUE, Wash., Jan. 10 /PRNewswire-FirstCall/ -- ALLTEL
(NYSE:AT) has reached an agreement to purchase Western Wireless
Corporation (NASDAQ:WWCA) in a stock-and-cash transaction valued at
approximately $6 billion. ALLTEL will gain about 1.4 million
domestic wireless customers in 19 western and midwestern states
that are contiguous to existing properties, giving the company 10
million domestic wireless customers in 33 states and creating
additional scale and scope in attractive and complementary markets.
It also adds 1.6 million international customers in six countries.
Each share of Western Wireless stock will be exchanged for .535
shares of ALLTEL common stock and $9.25 in cash. Western Wireless
shareholders will have the ability to make an all-stock or all-cash
election, subject to proration. In aggregate, ALLTEL will issue
approximately 60 million shares of stock and pay approximately $1
billion in cash. ALLTEL also will assume estimated net debt of $1.5
billion. The transaction, expected to close by mid-year 2005, will
be accretive to earnings in 2006. The agreement requires approval
from Western Wireless shareholders and regulatory authorities. The
stock portion of the merger consideration is expected to be
tax-free to Western Wireless shareholders. "This transaction
strengthens ALLTEL's position as the nation's top regional
communications company and makes sense financially and
strategically," said Scott Ford, ALLTEL president and CEO. "ALLTEL
will maintain a solid balance sheet and financial flexibility while
adding properties in the high-growth wireless industry. 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. We look forward to
servicing their customers and benefiting from the leadership and
experience of John Stanton, who will serve on our board." Western
Wireless, based in Bellevue, Wash., is a premier rural
communications provider with wireless operations in 107 markets in
19 states and international operations that are licensed to service
more than 50 million people in six countries, primarily Austria and
Ireland. The domestic retail stores operate under the Western
Wireless and Cellular One brand names. "The wireless industry is
gravitating swiftly to a smaller number of large national and
regional players," said John W. Stanton, chairman and CEO of
Western Wireless. "The combination of Western Wireless with ALLTEL
creates a rural operator using multiple technologies with the
largest footprint in the country. We believe that combining forces
is in the best interests of our shareholders, customers and
employees. We are confident in the future of ALLTEL and look
forward to becoming a major shareholder in this exciting company."
Following are highlights of the transaction: -- ALLTEL will be the
nation's fifth-largest wireless carrier with 10 million domestic
wireless customers serving a population of 72 million in 33 states,
covering about 25 percent of the U.S. population and 56 percent of
the land mass in the contiguous United States; 1.6 million
international wireless customers in six countries serving a
population of 50.6 million; and 3 million wireline customers in 15
states. -- The combination builds a stronger wireless presence for
both retail and wholesale operations. The company will have a
retail presence in 33 states and will become a leading independent
regional roaming partner for each of the nation's top four wireless
carriers. -- ALLTEL will have nearly $10 billion in annual revenues
and operating income before depreciation and amortization of nearly
$4 billion. ALLTEL's revenue mix increases to 70 percent wireless,
the fastest- growing area in the communications industry. -- ALLTEL
will add wireless operations in 9 new states: California, Idaho,
Minnesota, Montana, Nevada, North Dakota, South Dakota, Utah and
Wyoming. The transaction also significantly expands its wireless
operations in several other states, including Arizona, Colorado,
New Mexico and Texas. -- The addition of the international
properties will diversify ALLTEL's wireless assets and increase
growth opportunities. -- The company expects net present value of
operating synergies, interest and tax savings to be approximately
$800 million. -- ALLTEL will maintain a solid credit rating and a
well-capitalized balance sheet and ample liquidity. The company
remains well positioned for growth and the generation of free cash
flow. "This combination strengthens ALLTEL's position as a key
player in the highly competitive communications industry," Ford
said. "This transaction is in keeping with ALLTEL's efforts to
maintain our financial discipline while adding wireless properties
that contribute to our long-term growth." Stephens Inc. and Merrill
Lynch & Co. served as financial advisers to ALLTEL and rendered
a fairness opinion. Goldman Sachs also rendered a fairness opinion
to ALLTEL. Bear, Stearns & Co. Inc. served as financial adviser
to Western Wireless and rendered a fairness opinion. Skadden, Arps,
Slate, Meagher & Flom LLP served as counsel to ALLTEL.
Wachtell, Lipton, Rosen & Katz and Friedman Kaplan Seiler &
Adelman LLP served as counsel to Western Wireless. ALLTEL is a
customer-focused communications company with more than 13 million
customers and $8 billion in annual revenues. ALLTEL provides
wireless, local telephone, long-distance, Internet and high-speed
data services to residential and business customers in 26 states.
Western Wireless Corporation, owner of the Cellular One brand, is a
leading provider of rural wireless communications services to more
than 1.4 million customers in the western United States.
Headquartered in Bellevue, Wash., Western Wireless Corp. operates
wireless cellular phone systems and company-owned retail stores in
19 western states under the Western Wireless and Cellular One brand
names and licenses the Cellular One name in 16 additional states
and the Caribbean. Cellular One has been one of America's most
recognized wireless brands for more than 20 years. For more
information about Western Wireless Corp., visit
WesternWireless.com. Information on Cellular One may be found at
CellularOne.com. ALLTEL claims the protection of the safe-harbor
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
subject to uncertainties that could cause actual future events and
results to differ materially from those expressed in the
forward-looking statements. These forward-looking statements are
based on estimates, projections, beliefs, and assumptions and are
not guarantees of future events and results. Actual future events
and results may differ materially from those expressed in these
forward-looking statements as a result of a number of important
factors. Representative examples of these factors include (without
limitation) adverse changes in economic conditions in the markets
served by ALLTEL; the extent, timing, and overall effects of
competition in the communications business; material changes in the
communications industry generally that could adversely affect
vendor relationships with equipment and network suppliers and
customer relationships with wholesale customers; changes in
communications technology; the risks associated with the
integration of acquired businesses; adverse changes in the terms
and conditions of the company's wireless roaming agreements; the
potential for adverse changes in the ratings given to ALLTEL's debt
securities by nationally accredited ratings organizations; the
availability and cost of financing in the corporate debt markets;
the uncertainties related to ALLTEL's strategic investments; the
effects of work stoppages; the effects of litigation; and the
effects of federal and state legislation, rules, and regulations
governing the communications industry. In addition to these
factors, actual future performance, outcomes, and results may
differ materially because of more general factors including
(without limitation) general industry and market conditions and
growth rates, economic conditions, and governmental and public
policy changes. Investor Meeting and Webcast ALLTEL and Western
Wireless will hold a meeting and teleconference/ webcast for the
investment community today at 9:00 AM EST. The meeting will take
place at the St. Regis Hotel, 2 East 55th Street, New York. The
dial-in numbers for the call will be 888-203-7667 (domestic) or
719-955-1566 (international). The call can also be accessed through
both companies' websites at: http://www.alltel.com/investors and
http://www.wwireless.com/. The access code is 289432 for both the
live call and the replay. The telephonic replay of the call should
be available later today at 888-203-1112 and 719-457-0820. Media
Call ALLTEL and Western Wireless will also host a conference call
for the media today at 11:30 AM EST. The dial in numbers for the
press call will be 800-811-0667 (domestic) or 913-981-4901
(international). A replay of this call should be available today by
dialing 888-203-1112 (domestic) or 719-457-0820 (international).
The access code for the live call and the replay is 384284. In
addition, a satellite feed of today's investor meeting will be
available simultaneously with the event. The details for the
downlink are as follows and the feed is free for unrestricted use:
Satellite coordinates Satellite - Galaxy 11 Orbital Slot - 91' West
Band - Ku Transponder - 12 Downlink Frequency - 11942.000 MHZ
Downlink Polarity - Vertical Western Wireless, Nasdaq: WWCA
http://www.wwireless.com/ ALLTEL, NYSE: AT http://www.alltel.com/
For ALLTEL For Western Wireless Rob Clancy 501-905-8991 Steve
Winslow 425-586-8032 Vice President - Investor Relations Vice
President - Treasurer Andrew Moreau 501-905-7962 Jeffrey Taufield
212-521-4815 Vice President - Corporate Communications Andrea
Calise 212-521-4845 Kekst and Company DATASOURCE: ALLTEL CONTACT:
For ALLTEL, Rob Clancy, Vice President - Investor Relations,
+1-501-905-8991, or , or Andrew Moreau Vice President - Corporate
Communications, +1-501-905-7962 or ; For Western Wireless, Steve
Winslow, Vice President - Treasurer, +1-425-586-8032 or , or
Jeffrey Taufield, +1-212-521-4815 or Andrea Calise,
+1-212-521-4845, both of Kekst and Company Web site:
http://www.alltel.com/ http://www.wwireless.com/
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