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Rural telephone services company Alltel Corp. issued a $9 billion hostile takeover offer late Tuesday for its largest competitor, CenturyTel Inc. The deal offers CenturyTel stockholders either $43 for each of their shares — a 40.4 percent premium over the company’s Tuesday closing price of $30.62 — or 0.6934 Alltel shares. Alltel would also assume CenturyTel’s debt. In the past three weeks, CenturyTel, of Monroe, La., had twice rejected Alltel’s offer to buy the company. The proposed merger, said the company, would create a telecom provider focused on rural markets with combined revenues of $10 billion and roughly 7.2 million wireless and 4.4 million wireline customers. Alltel, based in Little Rock, Ark., made its first offer July 26, and again on Aug. 10. Alltel presented CenturyTel with its purchase offer in a letter sent Tuesday by Alltel CEO Scott Ford to CenturyTel President and CEO Glen Post. Alltel spokesman Andrew Moreau said the company hopes that by making the bid public “the management and shareholders will be able to see the offer we’ve made and the opportunity it represents.” When asked if Alltel plans to take the offer to the shareholders, Moreau said Alltel’s plan is to “negotiate a friendly deal with CenturyTel’s management.” In a statement Tuesday CenturyTel said its board of directors had unanimously rejected Alltel’s previous proposals after receiving advice from its financial adviser, J.P. Morgan, and legal adviser, Wachtell, Lipton, Rosen & Katz. In his letter Tuesday, Ford noted that CenturyTel had rejected Alltel’s approach, in part, because CenturyTel planned to separate its wireless and wireline businesses. But, Ford wrote, “A merger between our two companies would allow CenturyTel to avoid the significant risks and potential tax inefficiencies of separating CenturyTel’s wireless and wireline businesses.” The unsolicited bid come six months after Alltel cut nearly 1,000 jobs and warned that its 2001 earnings would fall short of Wall Street expectations. Alltel more than doubled in size over the past three years, following a series of acquisitions highlighted by the 1998 purchases of 360 Communications Co. for $6 billion and Aliant Communications Inc. for $1.8 billion. In July 2000, Alltel paid SBC Communications $400 million for wireless spectrum properties in and around New Orleans and Baton Rouge, La., and in June 2000, purchased wireless properties in Ohio, Florida and Alabama from GTE Corp., which was forced to sell the assets as part of its merger with Bell Atlantic. Merrill Lynch & Co. and Stephens Inc. are Alltel’s financial advisers, and the New York’s Skadden, Arps, Slate, Meagher & Flom is the legal counsel. Copyright (c)2001 TDD, LLC. All rights reserved.

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