AT&T Agrees To Buy Dobson Communications
Friday, June 29th 2007, 6:09 pm
By: News On 6
SAN ANTONIO (AP) _ AT&T Inc., the nation's largest wireless carrier, agreed Friday to acquire rural wireless provider Dobson Communications Corp. for $2.8 billion in cash.
The offer of $13 per share adds about 1.7 million customers to AT&T's nearly 62 million at a time when some analysts have questioned how much larger carriers can grow in a U.S. wireless market that is saturated.
The offer represents a 17 percent premium over Dobson's closing price Friday of $11.11 in trading on the Nasdaq Stock Exchange. Including debt, the deal is worth a total of about $5.1 billion.
Oklahoma City-based Dobson does business under the Cellular One brand in rural and suburban markets in 17 states and has provided roaming services to AT&T since 1990.
AT&T Chief Executive Randall Stephenson, who took over for long-serving Ed Whitacre Jr. earlier this month, has said AT&T will be a wireless-centered company going forward.
The announcement of the Dobson acquisition came the same day that Apple Inc.'s iPhone went on sale. AT&T is the sole carrier for the hotly anticipated device, and Dobson's Chairman Everett Dobson noted that the acquisition by AT&T is the only way Dobson's customers could get access to the device.
Stan Sigman, the president and chief executive of AT&T's mobility group, said Dobson's network and technology would fit almost perfectly with the company's existing network.
The company said the acquisition would have only minimal effect on the expected earnings per share for the year and would have a positive and growing effect on earnings and cash flow in the second year after the deal closes.