Telephone company GTE Corp. said Tuesday it has reached an agreement to acquire for $255 million in cash the 10 percent of Contel Cellular Inc. that it does not already own.
The offer, for $25.50 a share, represents an increase from the $224 million, or $22.50 a share, that GTE bid for the remaining stake in Atlanta-based Contel Cellular in September.
GTE is offering to acquire the Class A common shares of Contel Cellular, which represent the 10 percent of the company held by the public. GTE owns all the Class B common shares, which represent 90 percent of Contel.
Stamford, Conn.-based GTE, which offers local phone service in a number of states and is the second-largest cellular provider in the U.S., acquired the stake in Contel Cellular as part of its 1991 merger with Contel Cellular’s parent, Contel Corp. Valued at $6.6 billion, the merger was one of the largest in the telecommunications industry.
Under the terms of the agreement with Contel Cellular, a newly formed subsidiary of GTE would merge into Contel Cellular.
GTE and Contel Cellular also said they had reached a tentative agreement to settle suits filed by shareholders who contended the $224 million offer had been too low.
GTE stock rose 37 cents to close at $30.50 on the New York Stock Exchange. Trading in Contel Cellular’s A shares was halted for the news announcement. The stock last traded at $24.25 on the Nasdaq system Friday.
