NEW YORK-Cellular and personal communications services carrier Western Wireless Corp., Issaquah, Wash., announced that its two largest investors planned to sell 10 million shares of their stock in a public offering.
Hellman & Friedman L.L.C., San Francisco, a manager of private-equity funds, invested in a predecessor company to Western Wireless in 1991. It has asked Western Wireless to register 8 million of its 25.1 million shares for sale.
In 1992, The Goldman Sachs Group L.P., a New York-based investment bank that also manages private-equity funds, invested in another predecessor company to Western Wireless. Goldman asked to register 2 million of its 12.1 million shares in the carrier for sale.
Even after the sale, Hellman & Friedman still will be Western Wireless’ largest shareholder and Goldman Sachs its second largest. Together, they will hold 36 percent of Western Wireless’ shares. Hellman will retain its two seats and Goldman its one seat on the carrier’s board of directors.
John Stanton, chairman and chief executive officer of Western Wireless, and Theresa Gillespie, its senior vice president, are the next largest shareholders in the wireless provider. Neither they nor any member of the company’s senior management have registered their shares in the company for sale in this offering, Western Wireless said. Furthermore, the company won’t offer any primary shares.
“Given the continued large ownership interest by both funds, we view these planned sales as normal monetization on the part of founding investors,” said Brian G. Coleman, a director of Toronto Dominion Securities (USA) Inc., New York, in a release issued immediately following Western Wireless’ announcement.
“While the announced sales represent a supply overhang in the near term, we believe the improved share float that will result from these sales will provide a more liquid stock, which should ultimately address some investor frustration over the limited share float,” he said.
The stock available for trading on the secondary market would rise dramatically once the announced sales are completed, according to TD Securities. The float would increase by 65 percent, to 25.4 million shares from 15.4 million shares outstanding now, according to the investment bank.
Toronto Dominion Securities also disclosed it “has undertaken an underwriting liability or provided advice for a fee with respect to the securities of Western Wireless Corp. within the past 36 months.”
