nTelos Could Sell to Shentel for $200 Million as Board Considers Strategic Opportunities

by Istvan Fekete on May 19, 2015

nTelos could be in talks about a possible takeover by peer Shenandoah Telecommunications, known as Shentel. While the executives are keeping mum on this deal, since there are many details that need to be ironed out, CEO Rodney Dir said earlier last week that the executive board is focused on improving shareholder value and potential strategic opportunities.

The comment came hot on the heels of a Financial Times article, which, citing anonymous sources, claimed that Shentel is about to buy nTelos for $200 million.

What is significant is that nTelos is the exclusive provider of Sprint’s brand in 70% of West Virginia and western Virginia. nTelos competes directly with Shentel in some areas, and there is a 30% overlap in their territories.

“There are no limitations to a transaction as part of the [Sprint Network Agreement]. In our opinion, such a transaction would have scale benefits and is likely to pass regulatory muster given the rural nature of the footprint,” Jefferies analysts wrote in a research note of a potential merger between nTelos and Shentel.

Dir said “the real opportunity for us is to really position ourselves as a local, community-based carrier. We need to leverage our strength in the communities as well as our strength and our relationships with the rural markets.”

According to Dir, the company has spent the past 12 months identifying the strategic relevance of its assets. nTelos has a strong spectrum portfolio and a strong partnership with Sprint. All of these are really key, Dir said during the earnings call on May 1.

Earlier this year nTelos made headlines when it announced the sale of 91 of its 103 cell towers to an affiliate of Grain Management for $39.3 million. Also, it inked a deal with T-Mobile: The latter bought some of its 1900 MHz PCS spectrum for $56 million as part of nTelos’ exit from Eastern Markets.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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