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Verizon may buy wireless firm Alltel

June 05, 2008|From Bloomberg News

Verizon Communications Inc., seeking to challenge AT&T Inc., is in discussions to buy wireless provider Alltel Corp., according to two people familiar with the talks.

TPG Inc. and Goldman Sachs Group Inc., which took Alltel private last year in a deal valued at $27.5 billion including debt, would get a slight premium to the equity they invested in Alltel, said one of the people, who asked not to be identified because the talks were private. Their lenders would get less than face value for the debt they still hold on their books.

The purchase would make New York-based Verizon the top mobile-phone company in the U.S., passing AT&T. Verizon Chief Executive Ivan Seidenberg is relying on wireless as customers scrap land lines.

Verizon, TPG, Goldman Sachs and Alltel declined to comment.

When the buyout of Little Rock, Ark.-based Alltel was announced in May 2007, some speculated that a bigger rival would eventually purchase the company because Alltel's subscribers are mainly in rural areas and it carries calls for customers of AT&T and Verizon where they lack coverage. Alltel had more than 13 million customers in the first quarter.

Shares of Verizon fell 38 cents to $36.98.

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