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Report: Private Equity Groups Looking To Acquire Alltel

Verizon Wireless would seem to be the most likely acquirer, because it shares the same Qualcomm-provided CDMA infrastructure.
Alltel's unannounced effort to sell itself may be close to fruition.

Prospective buyers have been kicking the company's tires for weeks now, and the Wall Street Journal reported Wednesday that private equity firms are closing in on a deal.

With more than 12 million subscribers, the fifth-largest mobile phone provider has consistently ranked high on consumer evaluation polls and has paced its larger competitors in rolling out advanced features and services. Alltel added 237,000 net new subscribers in its latest reported quarter.

Verizon Wireless would seem to be the most likely acquirer, because it shares the same Qualcomm-provided CDMA infrastructure. The other major CDMA provider -- Sprint -- has its hands full digesting its acquisition of Nextel and rolling out ambitious 3G and WiMAX nationwide networks.

The other major providers -- AT&T's Cingular Wireless and T-Mobile -- use the European-developed GSM infrastructure, so Alltel wouldn't have an immediate attraction to them. Still, none of the "Big Four" cell phone service providers has expressed an interest in Alltel publicly.

Noting that Alltel has a market capitalization of $22.4 billion, the Wall Street Journal said three separate groupings of private equity buyers have been formed to evaluate a takeover of Alltel. They are Blackstone Group and Providence Equity Partners; TPG Capital LLC and a unit of Goldman Sachs Group; and Carlyle Group and Kohlberg Kravis Roberts & Co. A takeover by a private equity operation presumably could hold and operate Alltel until a mobile phone operator appeared ready to bid for the company.

Alltel has been taking on a nationwide footprint as it seeks to move beyond its strongholds in the Midwest, the West, and the South.