metro
06-30-2007, 01:59 PM
AT&T to buy Dobson for $2.8 billion
By Jim Stafford
Business Writer
Oklahoma City-based Dobson Communications became the latest domino to fall Friday in the ongoing wireless telecommunications industry consolidation, agreeing to a $2.8 billion acquisition by telecommunications giant AT&T.
That equates to a value of $13 per share for Dobson stock, a 17 percent premium over the stock's closing price of $11.11 in Friday's trading on the Nasdaq market.
"It's neither a happy day nor a sad day,” said Everett Dobson, the company's founder and chairman of the board. "It's a day that our board of directors exercised their duty and did what they are charged to do. They analyzed this transaction at length and in depth. The board and myself and our senior management team came to the conclusion that this is in the best interest of our shareholders. And I believe it to be a very fair transaction for them and a good purchase price.”
Dobson said officials with both companies hope the deal can clear all the required regulatory hurdles and will close by the end of the year.
Dobson employs about 325 people at its Oklahoma City headquarters in the northwest part of the city and another 250 at a call center in the city. It employs 2,350 people systemwide.
Neither Dobson nor an AT&T spokeswoman would comment on the fate of the headquarters or the Dobson employees in the city.
"It is fair to say that there is some amount of job duplication and that duplication is largely in corporate headquarters functions,” Dobson said. "They have indicated to us that they will work hard to find a home at AT&T for as many Dobson employees as possible.”
AT&T is the nation's largest wireless service provider with 61 million subscribers. The Dobson acquisition will bring it 1.7 million additional subscribers in 17 states.
More importantly, the deal expands AT&T's presence into some rural areas it has not served. Dobson and AT&T have a national roaming agreement and use the same wireless technologies.
"The main point we want to make about this is we really think it is going to have big benefits for Dobson customers and AT&T customers,” said AT&T spokeswoman McCall Butler.
Dobson operates as CellularOne by Dobson Cellular Service in its service territories. Many of those rural areas are not currently served by AT&T, Dobson said.
"I believe this transaction is a significant benefit to the existing Dobson customers,” Dobson said. "I think it's a significant benefit to the communities we serve, particularly those where AT&T does not offer service. Our customers will be joining the leading service provider in the United States.”
AT&T officials made the first move in the deal, approaching Dobson officials "a while back” about a possible acquisition, Dobson said.
"The rural market is attractive to us, and the addition of Dobson to our wireless family will expand our network coverage and better allow the customers of both companies to be connected whenever, wherever and however they want,” said Randall Stephenson, the Oklahoma City native who is chief executive officer of San Antonio-based AT&T.
Roy Williams, president of the Greater Oklahoma City Chamber of Commerce, said the deal has the potential to enhance AT&T's presence in the city.
"What we are hopeful for as this whole process plays out is that AT&T will continue to have a presence here and it will grow, this being an avenue for that to happen,” Williams said.
Industry analyst Thomas Lee with J.P. Morgan called the value that Dobson shareholders received an "incredibly nice price,” because the stock hit a low of about $1 about only three years ago. Steven Dussek became president and chief executive officer in April 2005.
"This management team deserves a lot of credit for turning around a business that was struggling for growth,” Lee said. "It's been one of the best success stories in the wireless industry over the past five years.”
Dobson Telephone Co. and its CoreVault subsidiary and other related companies are not part of the transaction, Dobson said.
The headquarters campus from which Dobson operates along Memorial Road is owned by the Dobson family, he said, and also is not part of the transaction.
In recent years, industry players both big and small have been acquired as the wireless industry has consolidated.
Sprint bought Nextel in 2005. Cingular bought AT&T Wireless in 2004.
Alltel bought Western Wireless in 2005 and itself was bought by a pair of private investment groups earlier this year.
"We started this company 19 years ago, and we have done some 30 acquisitions ourselves,” Dobson said.
"I can remember in the early 1990s there was a core group of companies like ourselves that were growing wireless markets in rural America and we are one of the few that are left. I guess this time the shoe is on the other foot, but I'm proud of the effort that our senior management team and all of our employees have done.”
Contributing: Business Writer Steve Lackmeyer
By Jim Stafford
Business Writer
Oklahoma City-based Dobson Communications became the latest domino to fall Friday in the ongoing wireless telecommunications industry consolidation, agreeing to a $2.8 billion acquisition by telecommunications giant AT&T.
That equates to a value of $13 per share for Dobson stock, a 17 percent premium over the stock's closing price of $11.11 in Friday's trading on the Nasdaq market.
"It's neither a happy day nor a sad day,” said Everett Dobson, the company's founder and chairman of the board. "It's a day that our board of directors exercised their duty and did what they are charged to do. They analyzed this transaction at length and in depth. The board and myself and our senior management team came to the conclusion that this is in the best interest of our shareholders. And I believe it to be a very fair transaction for them and a good purchase price.”
Dobson said officials with both companies hope the deal can clear all the required regulatory hurdles and will close by the end of the year.
Dobson employs about 325 people at its Oklahoma City headquarters in the northwest part of the city and another 250 at a call center in the city. It employs 2,350 people systemwide.
Neither Dobson nor an AT&T spokeswoman would comment on the fate of the headquarters or the Dobson employees in the city.
"It is fair to say that there is some amount of job duplication and that duplication is largely in corporate headquarters functions,” Dobson said. "They have indicated to us that they will work hard to find a home at AT&T for as many Dobson employees as possible.”
AT&T is the nation's largest wireless service provider with 61 million subscribers. The Dobson acquisition will bring it 1.7 million additional subscribers in 17 states.
More importantly, the deal expands AT&T's presence into some rural areas it has not served. Dobson and AT&T have a national roaming agreement and use the same wireless technologies.
"The main point we want to make about this is we really think it is going to have big benefits for Dobson customers and AT&T customers,” said AT&T spokeswoman McCall Butler.
Dobson operates as CellularOne by Dobson Cellular Service in its service territories. Many of those rural areas are not currently served by AT&T, Dobson said.
"I believe this transaction is a significant benefit to the existing Dobson customers,” Dobson said. "I think it's a significant benefit to the communities we serve, particularly those where AT&T does not offer service. Our customers will be joining the leading service provider in the United States.”
AT&T officials made the first move in the deal, approaching Dobson officials "a while back” about a possible acquisition, Dobson said.
"The rural market is attractive to us, and the addition of Dobson to our wireless family will expand our network coverage and better allow the customers of both companies to be connected whenever, wherever and however they want,” said Randall Stephenson, the Oklahoma City native who is chief executive officer of San Antonio-based AT&T.
Roy Williams, president of the Greater Oklahoma City Chamber of Commerce, said the deal has the potential to enhance AT&T's presence in the city.
"What we are hopeful for as this whole process plays out is that AT&T will continue to have a presence here and it will grow, this being an avenue for that to happen,” Williams said.
Industry analyst Thomas Lee with J.P. Morgan called the value that Dobson shareholders received an "incredibly nice price,” because the stock hit a low of about $1 about only three years ago. Steven Dussek became president and chief executive officer in April 2005.
"This management team deserves a lot of credit for turning around a business that was struggling for growth,” Lee said. "It's been one of the best success stories in the wireless industry over the past five years.”
Dobson Telephone Co. and its CoreVault subsidiary and other related companies are not part of the transaction, Dobson said.
The headquarters campus from which Dobson operates along Memorial Road is owned by the Dobson family, he said, and also is not part of the transaction.
In recent years, industry players both big and small have been acquired as the wireless industry has consolidated.
Sprint bought Nextel in 2005. Cingular bought AT&T Wireless in 2004.
Alltel bought Western Wireless in 2005 and itself was bought by a pair of private investment groups earlier this year.
"We started this company 19 years ago, and we have done some 30 acquisitions ourselves,” Dobson said.
"I can remember in the early 1990s there was a core group of companies like ourselves that were growing wireless markets in rural America and we are one of the few that are left. I guess this time the shoe is on the other foot, but I'm proud of the effort that our senior management team and all of our employees have done.”
Contributing: Business Writer Steve Lackmeyer