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UScellular and TDS Announce the Sale of Wireless Operations and Select Spectrum Assets to T-Mobile


UScellular and TDS Announce the Sale of Wireless Operations and Select Spectrum Assets to T-Mobile

May 28, 2024 – UScellular (NYSE: USM) announced they have entered into a definitive agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile for a purchase price of $4.4 billion, including a combination of cash and up to approximately $2 billion of assumed debt. Under the terms of the agreement, T-Mobile will acquire UScellular's wireless operations and approximately 30% of spectrum assets across several spectrum bands.  In connection with the transaction, T-Mobile expects to conduct an exchange offer under which holders of certain UScellular debt with a face value of approximately $2 billion will be offered the opportunity to participate in an exchange offer of their UScellular debt for T-Mobile debt.


As of market close May 28, 2024, USM’s public debt traded up an average of 18.50%[1], as the credit spreads on TDS and USM’s debt instruments compressed towards the spreads on T-Mobile’s debt. We believe active managers of preferred stocks can offer shareholders total return opportunities by seeking exposure to corporate action events (and valuation gaps) such as this. As capital market activity continues to rise in 2024, we believe there will be more asset sales and acquisitions of entire companies as private equity firms and public companies arbitrage valuation gaps and look for opportunities to deploy cash balances.


Per public holdings, as of May 28, 2024, Infrastructure Capital Advisors, LLC (“ICA”) beneficially holds positions in TDS and USM.

 

 

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Sources

 [1] The 18.50% change in price reflects the one-day average change in price of USM debt. For the one-day change in price, UZE traded up 18.10%, UZF traded up 18.44%, and UZD traded up 17.91%; for an average one-day change in price of 18.50%.


 

 

ABOUT US 

Infrastructure Capital Advisors, LLC (ICA) is an SEC-registered investment advisor that manages exchange traded funds (ETFs) and a series of hedge funds. The firm was formed in 2012 and is based in New York City. ICA seeks current income opportunities as a primary objective in most, but not all, of ICA's investing activities.


DISCLOSURE:

The information contained herein represents our subjective belief and opinions and should not be construed as investment advice. The information and opinions provided should not be taken as specific advice on the merits of any investment decision. Investors should make their own decisions regarding any investments mentioned, and their prospects based on such investors’ own review of publicly available information and should not rely on the information contained herein. Infrastructure Capital Advisors, LLC nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. This data includes information based on data and calculations sourced from Bloomberg and third-party sources. We believe that the data is reliable, we have not sought, nor have we received, permission from any third-party to include their information in this article. Comparative fund information is provided for informational purposes only, funds may have different characteristics and risks which are not presented. Many of the statements in this commentary reflect our subjective belief. 

 

This information is not an offer to sell, or solicitation of an offer to buy any investment product, security, or services offered by Jay Hatfield, or Infrastructure Capital Advisors, LLC, (“ICA”) or its affiliates. ICA, will only conduct such solicitation of an offer to buy any investment product or service offered by ICA, if at all, by (1) purported definitive documentation (which will include disclosures relating to investment objective, policies, risk factors, fees, tax implications and relevant qualifications), (2) to qualified participants, if applicable, and (3) only in those jurisdictions where permitted by law. Jay Hatfield or ICA has beneficial long position in securities discussed either through stock ownership, options, or other derivatives; nonetheless, under no circumstances does any article or interview represent a recommendation to buy or sell these securities. This discussion is intended to provide insight into a market event and preferred stocks and is not a solicitation of any kind.  ICA buys and sells securities on behalf of its fund investors and may do so, before and after any particular article herein is published, with respect to the securities discussed in any article posted. ICA's appraisal of a company (price target) is only one factor that affects its decision whether to buy or sell shares in that company. Other factors might include, but are not limited to, the presence of mandatory limits on individual positions, decisions regarding portfolio exposures, and general market conditions and liquidity needs. As such, there may not always be consistency between the views expressed here and ICA's trading or holdings on behalf of its fund investors. There may be conflicts between the content posted or discussed and the interests of ICA. Please reach out to the ICA for more information. Investors should make their own decisions regarding any investments mentioned, and their prospects based on such investors’ own review of publicly available information and should not rely on the information contained herein. ICA nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. We have not sought, nor have we received, permission from any third party to include their information in this article. Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or other comparable terminology. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. The information contained herein represents our subjective belief and opinions and should not be construed as investment, tax, legal, or financial advice.   If you have any questions, please reach out to Craig Starr at 212-763-8336. Opinions represented above are subject to change and should not be considered investment advice.


Past performance is not indicative of future results. The links to the fund fact sheets will provide standardized performance and risk disclosures.


©2024 InfraStructure Capital Advisors, LLC.

 

 

 

 

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