Verizon Wireless has asked the FCC for a 60-day extension to sell the roughly $3 billion in assets--spanning 105 markets--it was forced to divest from as a condition of its acquisition of Alltel. The carrier said it needs more time handle the transfer of the assets to prospective buyers. Verizon is requesting a new deadline of July 8 to complete the divestiture.
The assets include around 2.1 million former Alltel subscribers spread across 22 states, along with spectrum and other assets.
In a filing with the FCC, Verizon outlined its divestiture plans in detail, noting that in August 2008 it hired Morgan Stanley to help with the process and also began sending out notices about the assets to potential buyers. In November it detailed the assets in a 200-page confidential memo, and in December began holding day-long management meetings with prospective buyers. Since then, the wireless carrier has provided bidding procedures, draft acquisition and roaming agreements, financial information and other documents to prospective buyers.
Verizon's $28.1 billion acquisition of Alltel closed in early January. AT&T, the Blackstone Group, Kohlberg Kravis & Roberts & Co., and the Carlyle Group are among those reported to have made bids for the assets not acquired by Verizon.
In total, Verizon said in the filing, it has signed nondisclosure agreements with "over 70 prospective buyers and answered hundreds of due diligence questions posed by the bidders." Verizon said that bidding on the assets closed at the end of March, and that some of the bids were made contingent on Verizon answering more due diligence and data requests. The company said that it cannot meet the demands of both the bidders and the May 9 deadline imposed by the FCC.
"Although the company has diligently managed the divestiture process, the sheer size and complexity of the divestitures coupled with the current economic conditions have forced bidders to conduct far more due diligence than usual," Nancy Victory of Wiley Rein LLP wrote on behalf of Verizon in the filing. "This has made it impossible to complete the divestitures within the initial 120-day period" that ends May 9.
The divested territories, which are currently being managed by a trust, are offering wireless service until a buyer is found.
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