960407

AirTouch to buy

60 pc stake of

Cellular Inc

NEW YORK: AirTouch Communications Inc will buy out the sixty percent of Cellular Communications Inc it does not own for $1.65 billion, or $55 a share, the companies said.

The deal would give Cellular Communications shareholders a premium of almost $4 from the stock's on Thursday closing price of 51-3/16.

The buyout would give San Francisco-based AirTouch full ownership of a 50/50 venture between the companies that is the leading provider of Cellular services in Ohio and Michigan under the Cellular One brand name.

The venture has more than one million subscribers, $674 million in 1995 service revenue and $286 million in 1995 operating cash flow.

About 28 percent of the outstanding Cellular shares will be bought for cash with the remaining 72 percent exchanged for two series of newly issued AirTouch convertible preferred securities, the companies said.

AirTouch said it expects the deal will dilute earnings over the next few years. It said it expects to maintain its investment grade credit rating and minimize stockholder dilution with a 24 percent to 25 percent conversion premiums of the two new preferred securities.

AirTouch said the purchase would give it an additional $90 million of pro-forma 1995 operating cash flow and more than 325,000 customers, bringing its total domestic Cellular portfolio to $695 million of pro-forma 1995 proportionate operating cash flow and 2.6 million customers.

The $1.65 billion price tag includes the assumption of about $200 million of debt, the companies said.

The deal has been structured to give tax deferral to Cellular Communications stockholders receiving securities.

The acquisition is subject to regulatory and shareholder approval and is expected to close by this August.

In 1990, AirTouch bought a minority equity stake in Cellular and the right to acquire the rest of the company based on private market appraisals which were scheduled to begin this August.

Shares of AirTouch closed on Thursday down 5/8 at 29-5/8 on the New York Stock Exchange.-Reuter