Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Picks of the quarter -- Ignore unavailable to you. Want to Upgrade?

To: steve harris who wrote (3247)	4/16/2007 9:09:51 AM
From: Taro	Respond to of 20435

Zactly! Steve shorted DELL while I shorted CCOI. Steve did the opposite to what this board believed in and I did the opposite of what my Swiss banker friends told me to do. Next time I listen to Harris and just do the opposite to what he suggests in opposition to what I told him. LOL Taro

To: steve harris who wrote (3247)	5/9/2007 3:35:49 AM
From: Elroy	Read Replies (1) \| Respond to of 20435

Should be a good day for you..... Private-Equity Groups Form to Chase Alltel By DENNIS K. BERMAN AND AMOL SHARMA May 9, 2007; Page A3 At least three groups of private-equity buyers have formed to pursue a potential purchase of wireless carrier Alltel Corp., according to people familiar with the matter. The groups of suitors each have begun a series of meetings with Alltel's management, which has indicated to investors that it is pursuing strategic alternatives. The phone company, which has a market capitalization of $22.4 billion, is trying to figure out ways to take better advantage of its balance sheet. The company carries about $2.7 billion of long-term debt, a low figure for a company that produces roughly the same amount in cash flow each year. By comparison, rival Sprint Nextel Corp. carries debt of nearly twice its annual cash flow. Private-equity firms put debt on a company's own balance sheet to fund their purchase, so Alltel would appear to be an attractive candidate. But the price of the company's shares, up 7.8% on the year, has given many of the possible buyers pause. These potential buyers are also wary of some of the company's other limitations. Alltel has asked these buyers to keep their debt levels below about seven times Alltel's cash flow, people familiar with the matter said. That means the buyers could take on about $20 billion in debt and would have to fund the rest with equity from their funds. The buyout shops are putting heavy pressure on banks to put some of their own money into a deal. The groupings include Blackstone Group and Providence Equity Partners; TPG Capital LLC, formerly Texas Pacific Group, and the private-equity arm of Goldman Sachs Group Inc.; and Carlyle Group and Kohlberg Kravis Roberts & Co., according to the people familiar with the matter. Still other groups may be formed. Robert W. Baird & Co. analyst William Power stoked speculation last week, saying Alltel could fetch $70 a share in a takeover. Yesterday, Alltel stock rose as much as 3% and its options surged after Kevin Beebe, the company's group president of operations, canceled an appearance at an Oppenheimer & Co. investment conference, leading some in the market to suspect a deal is afoot. The shares were at $65.20 in 4 p.m. composite trading on the New York Stock Exchange. But people close to the process describe the final outcome as far from certain. Two of them put the odds of a deal at "50-50" as buyers fretted about the high cost and equity commitments. A spokesman for Alltel couldn't be reached for comment. Alltel shares have risen in recent months on rumors of a potential deal as well as the company's fairly strong performance. The company reported 237,000 net subscriber additions in the first quarter, outpacing analysts' estimates, and logged its lowest-ever customer turnover rate. It also boosted average revenue per customer, a key metric for wireless carriers. Alltel now has more than 12 million customers, mostly in small and rural markets throughout the Midwest, West and South. It is trying to transform itself from a wireless regional player to a national one, battling bigger rivals AT&T Inc., Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, and Sprint Nextel. The company has aggressively marketed its My Circle calling plan, which lets customers make free calls to any 10 landline or cellphone numbers. At the same time, Alltel faces emerging competition from smaller players, such as Leap Wireless International Inc. and MetroPCS Communications Inc., which offer flat-rate unlimited calling plans aimed at low-income, youth and ethnic customer segments. Many on Wall Street expect those small providers, who together have about six million subscribers, to merge at some point and become a bigger threat to first-tier cellphone companies. Alltel has done a series of deals in recent years to build up its user base, adding the wireless assets of CenturyTel Inc., Western Wireless and Midwest Wireless. It has tried to hawk those assets to other telecom providers, especially Verizon, which shares its CDMA network technology. But given how Alltel's stock has soared on speculation of a buyout, Verizon has been put off by the high price of a deal, people familiar with the company say. Verizon may not need to make an acquisition anytime soon, since it has been able to expand its wireless business at a faster clip than competitors in recent months. A spokesman for Verizon yesterday declined to comment. Last year, Alltel reported net income of $1.13 billion on revenue of $7.88 billion.