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Cellphone Tower Operator Crown Castle to Buy Rival

October 07, 2006|From Reuters

Crown Castle International Corp. on Friday said it would buy smaller rival Global Signal Inc. for $4 billion in stock and cash to create the biggest U.S. operator of towers that transmit calls to and from cellphones.

The deal follows a spate of consolidation in the U.S. wireless broadcast tower industry, where Crown Castle and rivals such as American Tower Corp. and SBA Communications Corp. compete to win business from four cellphone service providers.

After the acquisition, Crown Castle would operate more than 22,000 towers, supplanting American Tower as the industry leader, the Houston-based company said. The deal, expected to close in the 2007 first quarter, would increase Crown Castle's towers in top U.S. markets including Los Angeles.

Under the deal, Global Signal stockholders could convert each of their shares into 1.61 shares of Crown Castle or receive $55.95 a share, a 12% premium over Global Signal's closing price of $50.10 on Thursday. Crown Castle would also assume a $1.8-billion debt from the Sarasota, Fla.-based company.

Global Signal shares rose $3.84 to $53.94. Crown Castle shares fell $1.65 to $33.10.

Stanford Group analyst Clayton Moran said the deal would help Crown Castle serve cellphone operators looking to expand high-speed data services.

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