Centennial 100% Premium Buyout Could Ignite Sector (CYCL, T)

By Douglas A. McIntyre Published Nov 10, 7:45AM EST

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Centennial Communications Corp. (NASDAQ: CYCL) will be trading up huge on a $944 million buyout from AT&T Inc. (NYSE: T). This was a 100% premium-merger, and you have to wonder if the larger telecom giants still have an appetite to consolidate the players if it means they can grow their footprint.

Centennial is being bought to improve wireless coverage for customersin rural areas of the Midwest and Gulf Coast, Puerto Rico, and the U.S.Virgin Islands. Centennial’s 9 million NetPops include the Midwestregion of Indiana, Michigan, and Ohio; and Southeast cluster includedparts of Louisiana, Mississippi, and Texas.

As of May 31, Centennial had 1,092,600 wireless subscribers,and it operated 139 retail outlets in the United States and 77 retailoutlets in Puerto Rico. The $944 million comes to $8.50 per share incash for Centennial holders. It also assigns a per-customer cash valuefor the newest wireless telecom merger as being close to $860.00 beforebacking out the per-customer value for retail locations.

A 100%-premium is hard to not notice, even for a deal this small compared to AT&T’s $159 billion market cap.

Jon C. Ogg
November 10, 2008

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.