Private Equity Firms Eyeing Alltel: Report

By Spencer D. Chin

TMCnet Web Editor

 

Alltel is being eyed by at least three groups of private equity firms, according to a Wall Street Journal report, sending the mobile phone service provider’s stock soaring Wednesday.

 

The report was quoted as saying that Blackstone Group and Providence Equity Partners have teamed to consider acquiring Alltel, as have TPG Capital and Goldman Sachs and Carlyle Group and Kohlberg Kravis Roberts.

 

But the private equity firms may have to pay a steep price for the mobile phone provider, as several analysts have pegged Alltel’s stock price as high as $70 per share, the report said.

 

All three private equity groups have been meeting with Alltel's management, which has indicated to investors that it is pursuing strategic alternatives, according to the report.

 

Alltel, which has a market capitalization of $22.4 billion and $2.7 billion in long-term debt, is seeking to improve its balance sheet, the report stated.

 

The U.S.’s two largest phone carriers – AT&T (News - Alert) and Verizon Communications Inc., may also be suitors for Alltel, said Stifel Nicolaus & Co. analyst Christopher King in a Bloomberg.com report.