Posted 2:17 PM by steve

I can see Verizon wanting to buy Alltel, as that gives Verizon a whole bunch of additional wireless customers at a time where picking up subscribers is harder and harder.

But I can't understand the price Verizon is paying for Alltel. At $28.1 billion, Verizon is paying more than the $27.4 billion Alltel recently fetched when it was sold to private equity. If Verizon wasn't willing to pay more than $27.4 billion back then, I don't see why they'd be willing to pay any more now.

Furthermore, it was suspected that the private equity guys were having trouble with their banks and looked to sell as a way of extricating themselves from a deal that might have made sense seven months ago but was a bit shakier right now. In other words, Verizon was facing a motivated seller and could have driven a hard bargain, yet inexplicably, decided to pay more for Alltel than they probably had to pay.