Buyout rumors have buzzed since late December for wireless operator Alltel
On its face, the 9.7% offered premium looks paltry. The company was quick to point out in its press release, though, that the offer price actually represents a 23% premium to the price of its shares prior to reports that the company was reviewing "strategic options."
Even though it has 12 million customers, Alltel is still a small player when compared with biggies like Verizon Wireless
Alltel has been quite nimble, however. Over the past couple years, the company spun off its landline business as Windstream
As Fool colleague Dave Mock noted in a recent piece, the company picked up 237,000 net customers in the first quarter and churn was at an all-time low of 1.8%. The buyout valuation is at about 15 times trailing-12-month cash from operations, which, compared with other recent mega-buyouts, is on the high side.
As is common for all big deals, I suspect we'll see plenty of litigation, and there could be the possibility of a higher bid. But for Foolish investors, it's probably best to take your winnings off the table.
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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is ranked 1,898 out of 28,990 rated investors in Motley Fool CAPS. Windstream is a Motley Fool Income Investor selection. The Motley Fool has a disclosure policy.