Sprint PCS affiliate Alamosa Holdings Inc. reported that the board of directors at fellow affiliate AirGate PCS Inc. approved Alamosa’s $630 million acquisition of AirGate. The deal will further Alamosa’s position as Sprint PCS’ largest affiliate with more than 1.25 million subscribers in 19 states.
The deal calls for AirGate shareholders to receive 2.87 shares of Alamosa stock for every AirGate common stock held, which based on Alamosa’s share price at the close of business Dec. 7 was valued at $33 per AirGate share. AirGate shareholders will have the option to elect cash consideration in place of Alamosa stock, up to an aggregate amount of $100 million, with the per-share cash consideration based on the average closing price of Alamosa stock in the 10 trading days prior to the completion of the transaction multiplied by 2.87.
AirGate’s stock was trading down just over 2 percent early Wednesday at $32.87 per share.
“We believe that the increased scale of our combined company will provide meaningful operational and financial benefits, and will be a platform for future growth and value creation,” said David Sharbutt, chairman and chief executive officer of Alamosa. “In addition, with the significantly increased market capitalization, the combined company’s common stock should appeal to a broader investor group going forward and provide AirGate’s stockholders with a substantially more liquid market.”
The transaction is expected to close during the second quarter of next year.
