Hey all,
A little blurb from the latest Forbes (streetwalker section:
Dialing for dollars
d TELEPHONE and Data Systems (Amex:
TDS), the telecommunications giant, has been on
hold. Shares in the $1.2 billion (1996 sales)
company have dropped from around $49 last
year to a recent $39.75. Why? Startup costs in its
wireless personal communications services (PCS)
unit-an alternative to cellular phones-continued
losses in the paging unit and investor frustration
with the company's controlling shareholders, the
LeRoy Carlson family, who like to buy assets
cheap but do little to help realize shareholder
value.
Time to buy. TDS has three main businesses:
landline telephone (TDS Telecom, 100% owned),
cellular service (U.S. Cellular, 81% owned;
Amex: USM) and paging (American Paging, 82%
owned; Amex: APP). There's also the PCS
business (Aerial Communications, 83% owned;
Nasdaq: AERL).
Valuing TDS on its publicly traded units yields
about $44.40 per share. Using multiples closer to
its peers adds a few more dollars. How to unlock
this value? Investor Michael Price may have an
idea. He recently upped his holdings to 10% of
common shares and installed a crony on TDS'
board. The Carlsons are still in control, but Price
may annoy them into action. Analyst Salvatore
Muoio thinks the stock can hit $60 by mid-1998,
a 54% rise. |
