ALLTEL to spin-off wireline biz

Dec 09 2005 - 12:40 PM ET | In The News

Regional carrier ALLTEL today announced plans to spin-off of its wireline business with existing wireline provider VALOR Communications Group. This will allow the company to focus on its wireless service and become a more attractive target for acquisition.

A few notes about the deal:

• VALOR Communications will assume approximately $4.2 billion in ALLTEL debt
• Transaction is Tax Free for Alltel, VALOR and Respective Shareholders
• VALOR will issue 400 million shares of stock to the shareholders of Alltel
• It's expected to close in mid-2006

Sprint Nextel is expected to make a similar move with its wireline business. Some telecom analysts believe either Sprint Nextel or Verizon will buy ALLTEL to boost spectrum holdings and try and capture the largest carrier title. All three companies use CDMA network techology.