AT&T Dials Vanguard Cellular
AT&T said Monday it will buy Vanguard Cellular for about $1.5 billion in stock, cash and assumed debt to strengthen its cellular reach in the eastern United States.
The offer values Vanguard (VCELA) at $23 a share.
Shareholders of Vanguard will be given the choice of receiving $23 per share or 0.3987 shares of AT&T (T).
Shares of Vanguard rose 1 1/2 to 21 3/8. AT&T fell 7/8 to 57 3/4.AT&T said Vanguard's properties will fill a strategic gap in its footprint in the eastern U.S.
The companies expect the merger to close in the first quarter of 1999.
"This merger is a natural," said Dan Hesse, President of AT&T Wireless Services, said in a statement. "With Vanguard Cellular, AT&T can significantly increase its footprint in the eastern U.S., providing additional service offers and availability to our customers."
Vanguard Cellular's nearly 625,000 customers will "now have the benefits of being a part of the nation's largest, most advanced digital network," Hesse said.
AT&T was advised on the transaction by TD Securities, a unit of Toronto Dominion Bank. Wasserstein Perella & Co. advised Vanguard Cellular.
Vanguard Cellular is one of the largest independent operators of cellular telephone systems in the U.S.
Separately, Alexandria, Va.-based paging and wireless company Metrocall (MCLL) completed its purchase of AT&T's Advanced Messaging Division for $205 million.
The deal consists of $110 million in cash and convertible preferred stock with a face amount of $95 million. The series C preferred shares will be convertible into Metrocall common stock at a price of $10.40 per share.
Metrocall shares slipped 1/8 to 4 1/16 on Friday.
Written By Steve Gelsi