By Lisa Kerner
Charlotte, N.C., July 30 - Verizon Wireless agreed to acquire Rural Cellular Corp. for approximately $2.67 billion in cash and assumed debt.
The transaction, slated to close in the first half of 2008, will increase Verizon Wireless' customer base by more than 700,000. In addition, the company said it could realize more than $1 billion in synergies in reduced roaming and operations expenses.
Both companies' boards of directors have approved the agreement, which gives Rural Cellular stockholders $45.00 per share in cash, for a total equity price of $757 million on a fully diluted basis.
The per-share offer price is a 16% premium to the average closing price over the last 10 trading days and a 41% premium to Rural Cellular's closing price of $31.88 on July 27.
"The addition of Rural Cellular's markets will enable us to expand our services into areas where previously we had little or no presence, and will give Rural Cellular's Unicel customers access to the nation's most reliable network and a broader range of voice and data services," Verizon Wireless president and chief executive officer Lowell McAdam said in a company news release.
"Today, as the wireless industry continues to evolve, our board of directors has concluded that it is in the company's best interest to enter into a sale transaction with Verizon Wireless," Rural Cellular president and CEO Richard Ekstrand added.
Rural Cellular was advised by Bear, Stearns & Co., Skadden Arps Slate Meagher & Flom LLP and Falkenberg Capital. Verizon Wireless was advised by JPMorgan Chase & Co. and Debevoise & Plimpton LLP.
Verizon Wireless is a wireless voice and data network based in Basking Ridge, N.J.
Rural Cellular, located in Alexandria, Minn., provides wireless communication services under the Unicel brand.
| Acquirer: | Verizon Wireless
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| Target: | Rural Cellular Corp.
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| Transaction total: | $2.67 billion
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| Price per share: | $45.00
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| Announcement date: | July 30
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| Expected closing: | First half of 2008
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| Stock price for target: | Nasdaq: RCCC: $31.81 on July 27
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