Alltel pushes CenturyTel to negotiate

Alltel President and Chief Operating Officer Scott Ford has sent a letter to CenturyTel Vice Chairman, President and CEO Glen Post that urges the start of merger negotiations between the two companies.

In the letter Ford reminded Post that Alltel has met with almost all of its largest shareholders, many of whom are also CenturyTel stakeholders, and has received an "enthusiastic response" from the investment community as a whole. Ford said CenturyTel investors have called the potential merger "a very powerful combination" and have made it clear they believe CenturyTel's management "should be sitting down at the table."

Ford questioned what he called CenturyTel's "publicly stated business strategy to sell [its] wireline business and bolster [its] wireline business." He called CenturyTel's wireless business "subscale," and said the business has "consistently under performed" compared to other regional carriers. Consequently, he expressed doubt that CenturyTel could sell the business at a "substantial after-tax value."

Regarding the wireline business, Ford said CenturyTel's operating performance is consistently below Alltel's, and suggested that CenturyTel has received "little or no operating improvements" from its acquisition of access lines from Verizon Communications due to "acknowledged persistent integration problems."

Ford concluded that Alltel is "mystified" by CenturyTel's refusal to discuss the merger proposal, which calls for CenturyTel stakeholders to receive $43 per share or 0.6934 shares of Alltel stock, subject to proration.

Post responded with his own letter to Ford, in which he said there was "no reason to reconsider" the unanimous decision of the CenturyTel board of directors to reject the Alltel proposal.

He took Ford to task for releasing his letter to the media at the same time it was being faxed to CenturyTel, and characterized the letter as "clearly misleading." Post indicated CenturyTel has no intention of "enganing in [Alltel's] public letter writing campaign."

--Glenn Bischoff, senior writer