Article Abstract:
The value of both Centel Corp and Sprint Corp stock fell on the New York Stock Exchange following the announcement of a planned $2.69 billion acquisition. Centel Chmn John Frazee defended the deal in meetings with investors and analysts, saying that the best possible deal had been obtained. Frazee said that the merger of Centel, with its cellular and local telephone operations, and Sprint, with its long distance business, would create a highly competitive carrier. But objections were heard from several prominent Centel investors, and the value of its stock fell $10.50 a share to $32. Meanwhile, the value of Sprint stock fell $1.375 to $23.125, reducing the value of the stock involved in the swap from $2.85 to $2.69 billion. The value of other major telecommunications firms also declined. McCaw Cellular Communications stock fell $1.50 to $27.50; LIN Broadcasting Inc fell $3.50 to $68 and Vanguard Cellular Systems Inc fell $2.75 to $25.25.
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Article Abstract:
Several Bell regional holding companies, including American Information Technologies Corp, Bell Atlantic Corp, BellSouth Corp, Nynex Corp and US West Inc may make bids for certain assets of Centel Corp. Centel, based in Chicago and having share values of $60, has announced that it is putting itself up for sale. The $5 billion telecommunications company has not garnered the reaction to its sale that it had hoped. Analysts point to Centel's widely dispersed assets as a reason why reaction has been cold. Centel is involved with cellular communications in 17 states and and local telephone exchanges in six. The various regional Bell holding companies are more interested in licenses held by Centel that are located in the geographical areas in which they themselves operate.
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Article Abstract:
Contel Corp and GTE Corp have issued a memorandum of understanding, agreeing in principle to a merger via stock swap that would create the largest local-exchange telephone company in the US. The stock swap deal will involve GTE issuing 1.27 common shares for each of Contel's 160 million outstanding shares. The transaction is valued at $6.2 billion. The combined company will have 50 million potential cellular subscribers, and 17.7 million access lines, more than any of the seven bell regional holding companies. Contel's stock jumped $7.125 to $35.125 on the news; while GTE's fell $1.25 to close at $29.75.
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