CenturyTel sues Alltel

Rural independent telco CenturyTel has filed a lawsuit accusing Alltel, its would-be acquirer, of making misleading statements about its proposed merger and revealing confidential information.

Last week, Alltel publicly disclosed a $9 billion takeover bid for CenturyTel and revealed CenturyTel was exploring the sale of its wireless business.

The bid was rejected promptly by CenturyTel. In addition, CenturyTel Chairman and CEO Glenn Post expressed consternation that Alltel had revealed the news of his company’s planned wireless separation. That news was privileged information Alltel received as part of its own participation in the wireless auction, Post said in a statement.

After CenturyTel’s rejection, Alltel and its president and chief operating officer, Scott Ford, made statements implying the offer never received proper consideration from CenturyTel’s board.

“We’re disappointed that a 40% premium [got] a one-hour rejection,” the lawsuit cites Ford as saying.

Such a statement is demonstrably false, according to the lawsuit, which states Alltel’s public offer was identical to one CenturyTel thoroughly considered and rejected in July.

The suit claims Alltel and Ford knowingly made misleading statements in an effort to either gain control of CenturyTel--presumably by creating shareholder pressure on its board to accept the offer--or to damage the company.

In addition, by revealing CenturyTel’s plan to divest itself of its wireless operations, Alltel revealed confidential information, the suit says.

The lawsuit seeks an injunction prohibiting Alltel from involving itself in CenturyTel’s wireless divestiture as well as an unspecified monetary reward.

In a prepared statement, Alltel disputed CenturyTel’s claims.

“The lawsuit filed by CenturyTel on August 17 is totally without merit. As we have said from the beginning, Alltel would like to sit down with the CenturyTel management and discuss Alltel’s proposal for a friendly merger of our two companies. We think it would be much more productive to negotiate than litigate.”

Alltel representatives were not available for immediate comment. A spokesman for CenturyTel said the company is “letting the suit speak for itself.”