LUBBOCK, Texas-Sprint PCS affiliate Alamosa Holdings Inc. said it has entered into a confidentiality agreement with fellow affiliate AirGate PCS Inc. regarding a potential “combination” of the two companies. The agreement follows a public $355 million offer made by Alamosa for AirGate late last month that AirGate’s management initially said it was “seriously considering.”
As part of the agreement, which Alamosa said includes an extension of its offer through Dec. 8, Alamosa noted it has completed all material due diligence and confirmed to AirGate its offer of 2.8 Alamosa shares for each AirGate share. Alamosa also offered to give AirGate shareholders the option to elect cash consideration in place of stock up to an aggregate amount of $100 million.
Based on Alamosa’s closing price of $11.50 per share on Dec. 6, the offer represents consideration of $32.20 per AirGate share. AirGate’s stock, which jumped more than 20 percent following the initial offer on Nov. 22, was trading down just over 1 percent early Tuesday at $33.83 per share.
If completed, the deal would create the largest Sprint PCS affiliate with more than 1.2 million subscribers and operations in the Southeast, Midwest, Southwest and Northwest.
