Alltel Corp's high share price makes it a difficult purchase for a single private equity firm. So they're teaming up.
It could be a battle royale with the heavyweights who are teaming up. In one corner, The Blackstone Group and Providence Equity Partners are allying. In another corner, TPG Capital and Goldman Sachs' private equity arm are teaming up. And in yet another corner, Kohlberg Kravis Roberts & co and The Carlyle Group are banding together.
However, some industry analysts aren't sure a buyout is the right move. Rohit Sethi, a research director at Aladdin Capital said, "It’s not clear how private equity would generate the type of returns they need at Alltel's current stock price..." Still, Alltel's stock rose to $66/share yesterday.
Alltel Corp.'s credit spreads will weaken further if the company succumbs to a deal to take it private, however there are several impediments to any deal, including Alltel's relatively high share price.
Private equity firms Providence Equity Partners and The Blackstone Group are teamed up in a bid for the U.S. rural wireless telecoms service provider Alltel, a source familiar with the matter said on Wednesday.
(Continue reading this story on Reuters)