Report: Private-equity cos. partner for run at Alltel

Several private-equity groups have reportedly formed in an attempt to acquire Alltel Corp., according to the Wall Street Journal.
The paper said at least three groups exist that are pursuing the nation’s fifth-largest wireless carrier, including Blackstone Group and Providence Equity Partners; TPG Capital L.L.C. and the private-equity operation of Goldman Sachs Group Inc.; and Kohlberg Kravis Roberts & Co. and the Carlyle Group.
The paper noted that additional groups may be formed.
Analysts have pondered the wisdom of private-equity firms buying Alltel since the carrier doesn’t fit the usual profile of an acquisition target. Typically, private equity trolls for poorly performing companies in need of cost cuts or management changes, with an eye toward turning the company around and selling it for a profit. However, due to Alltel’s expensive shares and success in gaining customers and reaping profits, the company may not ultimately end up with a private-equity deal.
Further, since Alltel is valued so highly, it’s unlikely that larger carriers such as Verizon Wireless or Sprint Nextel Corp. would purchase the carrier, experts have said. Speculation about the carrier started earlier this year when it said it was reviewing its strategic options.
The Wall Street Journal cited “people close to the process” who put the odds of an Alltel deal at 50-50 because potential buyers were worried about the high cost and equity commitments.