Verizon Wireless last week agreed to acquire
The transaction will vault Alltel to the top of mobile service provider in U.S. market ahead of AT&T Inc. Naturally, shares of Verizon Wireless owners Verizon Communications and Vodafone both jumped on the announcement.
The $28.1 billion acquisition price is of particular note because it only represents a slight premium on the $27.85 billion that TPG and Goldman paid for Alltel last year.
However, that fact masks their profit. The two firms will make a combined $1.3 billion from the deal, receiving $5.9 billion in cash compared to their $4.6 billion equity investment. Not a bad return for a seven-month investment that was both overpriced and over-leveraged. —Dan Primack