VoiceStream buying Omnipoint
The acquirer providesBloomberg News
cellular service in Hawaii
BELLEVUE, Wash. -- VoiceStream Wireless Corp., which provides cellular phone service in the Western region including Hawaii, has agreed to buy Omnipoint Corp. for $4.6 billion in stock, cash and assumed debt to move into key East Coast markets.
Omnipoint holders will receive 0.825 VoiceStream shares and $8 in cash for each Omnipoint share. The offer values Omnipoint at $32.3375 a share, 55 percent more than Omnipoint's closing price yesterday. VoiceStream will also assume $2.6 billion in debt.
As part of the transaction, Hutchison Whampoa Ltd. of Hong Kong, VoiceStream's biggest shareholder, will invest $957 million in the combined company. Hutchison, which owns interests in wireless phone systems in 12 nations on five continents, will boost its VoiceStream stake to 30 percent from 24 percent.
"What we're able to do is deliver a larger footprint -- a national footprint," VoiceStream Chairman John Stanton said. He said the company also will be better positioned to offer service to major customers like large corporations.
VoiceStream entered the Hawaii market in early 1996, hiring 100 people and investing $14 million. It has four of its own retail outlets in Hawaii -- three on Oahu and one on Maui -- and sells its products through a number of other retailers.
Bellevue, Wash.-based VoiceStream and Bethesda, Md.-based Omnipoint use the global system for mobile communications, or "GSM" -- a digital standard. Their growth was hamstrung because they only offered service in limited regions. The combination will let VoiceStream sell wireless service in big Eastern cities like New York and Boston. The new company will be the ninth-largest U.S. wireless company with more than 1 million customers.