WASHINGTON- Alltel Corp. set a July 21 deadline for Western Wireless Corp. shareholders to vote in favor of Alltel’s pending acquisition of Western Wireless if they want to receive consideration in cash or shares of Alltel common stock. Alltel noted that Western Wireless shareholders who miss the deadline will have no input into the consideration they will ultimately receive.
Alltel previously had reported that each share of Western Wireless stock will be exchanged for 0.535 shares of Alltel common stock and $9.25 in cash, and that Western Wireless shareholders would have the ability to make an all-stock or all-cash election. In aggregate, Alltel said it will issue about 60 million shares of stock and pay about $1 billion in cash. Alltel said it would also assume about $1.5 billion in net debt.
The deal recently received approval from the Federal Communications Commission, despite Commissioner Michael Copps concerns about E-911 compliance, and from the Department of Justice, and is expected to close during the third quarter.
With the FCC approval, Copps said the agency should have required greater assurance from Alltel that it will comply with the Dec. 31 E-911 deadline as part of the agency’s conditional approval of the mobile-phone operator’s $6 billion acquisition of Western Wireless.
“The [FCC] order states that if the company fails to meet its E911 deployment responsibilities the commission `will not hesitate to take enforcement action.’ While that is positive, I believe we should have gone beyond this assertion to insist that the merged company immediately get itself on a path to full public-safety compliance. Because we do not, we could lose valuable time, and E-911 deployment might suffer. I am disappointed that we do not do more today to ensure compliance with our public-safety deadline,” said Copps.
Copps has repeatedly said the FCC should be doing more to improve homeland security communications and telecom infrastructure protection.
CTIA, the U.S. mobile-phone trade group, and rural cellular carriers recently asked the FCC to waive the E-911 handset deadline.
The FCC’s requirement that Western Wireless divest wireless assets in 16 markets in Arkansas, Nebraska and Kansas mirrors conditions imposed by the Justice Department last week.
Jonathan Adelstein, the other FCC Democrat, took a slightly different view of an E-911 issue, which is believed to come up as well in the pending $35 billion merger between Sprint Corp. and Nextel Communications Inc.
“While I am troubled by Alltel’s apparent difficulty in reaching the 95-percent penetration level by Dec. 31, 2005, I acknowledge the recent commitment to timely address these challenges and to ensure that the merged company remains on a `path to full compliance,’ ” said Adelstein.
At the same time, Adelstein said he was pleased FCC Chairman Kevin Martin agreed to initiate a proceeding to explore the issue of roaming and the effects of consolidation on the ability of smaller carriers to negotiate access to larger networks.
Dan Gonzales, a Martin aide, did not immediately return a call for comment.
Martin, while saying the Western Wireless divestitures will help preserve mobile-phone competition in certain rural markets, was silent on the E-911 issue in his statement.
RCR Wireless News Reporter Dan Meyer contributed to this report.
