Alltel Sought Buyers

It tried to get bids before taking a private-equity deal.
Author:
Publish date:

Alltel

(AT) - Get Report

hit the wall in attempting to lure a strategic buyer for its business before succumbing to private equity entreaties.

The Little Rock, Ark.-based wireless outfit tried to hook up with at least three of its communications industry peers but couldn't get a buyout deal, according to a filing submitted Wednesday with the

Securities and Exchange Commission

. Alltel's filing did not identify the strategic buyers it talked with.

Alltel had been reviewing its strategic options in the competitive mobile communications business as far back as early January, but it did not launch a formal auction until April. At that point, it hoped to lure a suitor by early June. Alltel then stepped up the pace, as word leaked of its intention to sell itself. The company agreed May 21 to a joint offer from

Goldman Sachs

(GS) - Get Report

and Texas Pacific Group worth $71.50 a share, or $24.7 billion.

On several occasions, Alltel expressed its desire that bidders move quickly in making an offer it could not refuse. Alltel's push may have given TPG and Goldman incentive to aggressively move in with an offer contingent on the "agreement not to 'shop' its bid to other participants." TPG and Goldman threatened they would withdraw their bid "if Alltel advised the other private equity teams that a proposal had been made."

TPG and Goldman originally submitted a $71-a-share initial bid before Alltel negotiated a bid that was 50 cents sweeter.

The buyout is expected to be financed with loans underwritten by

Citigroup

(C) - Get Report

, Goldman,

Barclays

(BCS) - Get Report

and the

Royal Bank of Scotland

.

Alltel will get a $1.5 billion revolver and a $14 billion term loan, as well as bonds totaling $7.7 billion, according to the filing.

Private equity partners TPG and Goldman will contribute some $4.6 billion in equity.