NEW YORK (Reuters) - Private-equity firms are exploring the idea of a leveraged buyout for Alltel Corp. (AT.N), the fifth-largest U.S. wireless operator, the Wall Street Journal reported on its Web site on Thursday.
Citing sources familiar with the matter, the Journal said that “Wall Street is buzzing about a possible deal.”
Spurring the talk is Alltel’s low debt relative to other telecom carriers, giving a buyer the ability to pile on debt as part of a purchase plan, the Journal said.
Alltel has a market value of $21.7 billion and a debt load of just under $3 billion, the paper said.
The Journal listed potential strategic buyers as Verizon Wireless, a joint venture between Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L), as well as Sprint Nextel Corp (S.N). It did not mention any private-equity firms by name.
Officials at Alltel, Sprint and Verizon Wireless were not immediately available for comment.
The company spun off its wireline business in July and merged it with Valor Communications, creating Windstream Corp. WIN.N
The company reported third-quarter net income of $187.2 million, or 48 cents a share, after revising its earlier report to fix the way it accounted for the spinoff of the wireline business.
In its original announcement in October, Alltel said that earnings excluding special items was 60 cents per share, below the average analyst forecast at the time of 63 cents, according to Reuters Estimates.