UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 19, 2002
CenturyTel, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 1-7784 72-0651161
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
100 CenturyTel Drive, Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 388-9000
Item 5. Other Events
On March 19, 2002, we entered into a definitive stock purchase
agreement to sell the stock of our wireless business to an affiliate of Alltel
Incorporated ("Alltel") in exchange for $1.65 billion in cash (approximately
$1.3 billion after tax), subject to certain working capital and other
adjustments which we do not expect to be material.
In connection with this transaction, we will divest our (i) interests
in our majority-owned and operated cellular systems, which at December 31, 2001
served approximately 797,000 customers and had access to approximately 7.8
million pops (as defined in our most recent 10-K Report), (ii) minority cellular
equity interests representing approximately 2.0 million pops at December 31,
2001, and (iii) licenses to provide personal communications services ("PCS")
covering 1.3 million pops in Wisconsin and Iowa. After the sale, we will retain
all of our local multi-point distribution system licenses covering approximately
12.6 million pops, and PCS licenses covering approximately 1.7 million pops. We
have agreed to maintain capital expenditures and sales and marketing spending at
certain specified levels through the closing, and to retain certain liabilities
associated with the pre-closing operation of our cellular business for various
periods of time. Alltel will not assume any indebtedness in connection with the
sale.
We will be committed to (i) seek acknowledgments from some of our
cellular partners confirming that they do not hold "first refusal" rights to
purchase certain of our cellular partnership interests, (ii) seek waivers from
certain other partners of their first refusal rights and (iii) in certain
instances, offer a limited number of our cellular partnership interests to
partners holding such rights. The sale is subject to the satisfactory completion
of these processes for various partnerships.
The sale is also subject to (i) approval by the Federal Communications
Commission (the "FCC"), (ii) our request to waive certain FCC rules not being
denied by the FCC, (iii) compliance with the notification and waiting period
requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and
(iv) various other customary closing conditions. Subject to these conditions, we
expect to complete the sale in the third quarter of 2002.
Based on current financing, operational and other assumptions, we
believe the net effect of this sale and our pending acquisition of wireline
assets from Verizon Communications, Inc. (excluding one-time transaction costs)
will be breakeven to $.03 accretive to earnings per share during the first full
year of operations.
In connection with the sale, (i) we have agreed to provide to Alltel
certain transition services and a long-term irrevocable right of use of our
Michigan fiber optic ring, and have dismissed the litigation we filed against
Alltel in federal court in August 2001 and (ii) Alltel has agreed to refrain for
one year from taking various actions to acquire control of us.
Additional information regarding these transactions are set forth in
our press release and stock purchase agreement dated March 19, 2002. These
materials are filed as exhibits to this Report, and the full text of our press
release dated March 19, 2002 (including our cautionary statements regarding our
forward-looking statements) is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits. The following exhibits are filed with this Report:
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2.1 Stock Purchase Agreement, dated as of March 19, 2002, by
and between CenturyTel, Inc. and Alltel Communications, Inc.
We undertake to furnish supplementally a copy of the omitted
schedules to this Agreement upon the request of the
Securities and Exchange Commission.
99.1 Press Release of CenturyTel, Inc. dated March 19, 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURYTEL, INC.
By: /s/ Neil A. Sweasy
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Neil A. Sweasy
Vice President and Controller