Western Wireless Chief Executive John Stanton and his wife stand to make up to $460 million in cash and stock after their company is sold to rival Alltel, based on Alltel's share...

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Western Wireless Chief Executive John Stanton and his wife stand to make up to $460 million in cash and stock after their company is sold to rival Alltel, based on Alltel’s share price yesterday.

Little Rock, Ark.-based Alltel agreed Sunday night to issue 60 million shares of stock and pay $1 billion cash for the Bellevue company as well as assume $1.5 billion of Western Wireless’ debt. Based on Alltel’s share price yesterday, the deal was worth nearly $4.3 billion, not including the debt.

Western Wireless shareholders will receive 0.535 Alltel shares and $9.25 cash for each Western Wireless share, although they can opt to receive an all-cash or all-stock mix instead. Stanton and his wife, Theresa Gillespie, are Western Wireless’ largest individual shareholders, controlling about 43 percent of the company’s voting shares.

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The companies said they expected the deal, for which regulatory approval is required, to close in May or June.

Alltel said it would become the nation’s fifth-largest wireless carrier after the transaction, with 10 million U.S. customers in 33 states. It will serve about half the area of the country — mainly rural parts of the South and West — and have the largest physical network of any wireless carrier.

It will add wireless operations in nine states, including California, Idaho, Utah, Nevada and North and South Dakota, and significantly expand operations in other states, including Arizona, Colorado and Texas.

Western Wireless owns the Cellular One brand and has about 1.4 million customers in the western United States. It also offers cellphone service through its international subsidiary in six countries, primarily Austria and Ireland.

Although Alltel also has fixed-line phone service, it would become more of a wireless company. About 70 percent of revenue will come from its wireless business — up from 60 percent today — with the rest related to its fixed-line phone businesses and other areas. Its annual sales will climb to nearly $10 billion.

Alltel will assemble a transition team to handle integration of the two companies, Chief Executive Scott Ford said in a conference call with analysts yesterday.

All of Western Wireless’ field operations and international business will likely remain in place, he said.

Layoffs are expected at Western Wireless, although Stanton said in an interview Sunday that the vast majority of the company’s employees will keep their jobs. At last reported count, Western Wireless had a work force of 3,765.

Stanton will resign from Western Wireless and join Alltel’s board of directors. In yesterday’s conference call, he said the combined company will have more to offer customers because of its broadened coverage area and ability to handle multiple cellphone technologies.

Alltel does a better job than Western Wireless in retailing, Stanton said, while Western Wireless is better at developing a business strategy for allowing other wireless carriers to use its network.

“By putting the two businesses together, I think we are going to get the best of both worlds,” he said.

Analysts yesterday generally had a positive view of the acquisition, saying it will boost Alltel’s subscriber base and give it a broader coverage territory. As with other telecom concerns, the company’s fixed-line business is declining, and so the issue now becomes how it will grow in the future, said Anthony Ferrugia, an analyst with A.G. Edwards.

“It’s hard to see them growing wireless any more quickly than they are now without continuing to make acquisitions,” Ferrugia said in an interview yesterday.

Jennifer Frizsche, an analyst with Wachovia Securities, wrote in a research note yesterday that the acquisition was slightly better for Western Wireless than expected. Still, the buy increases Alltel’s wireless mix and is a positive for the company, she wrote.

Alltel could become something of a “super-regional” carrier after buying Western Wireless, but it is well below the scale of the national carriers, Deutsche Bank analyst Nigel Coe wrote in a research note yesterday.

Stanton is considered one of the pioneers of the wireless industry in the United States. He built VoiceStream Wireless — now T-Mobile USA — from the ground up and helped sell it to German telecommunications giant Deutsche Telekom for $30 billion. He also helped build McCaw Cellular Communications, which was acquired by AT&T and later became AT&T Wireless.

Gillespie has held a number of executive positions at Western Wireless since its inception in 1991, serving as chief financial officer, senior vice president and currently as executive vice president in charge of finance and accounting.

Western Wireless’ share price rose 63 cents yesterday to close at $37.37, and Alltel shares dropped $1.37 to close at $54.75.

Kim Peterson: 206-464-2360