US Cellular Not Selling Itself Despite Investor Pressure

Wireless carrier US Cellular isn't interested in selling itself despite being pressured to do so by its largest investor, billionaire Mario Gabelli. Gabelli has been calling for a sale for years now, but his efforts intensified in recent months as US Cellular's revenue and stock price kept falling. The company's shares are currently hovering around $38, which is approximately 18-percent down year-on-year, and Gabelli insists that selling the firm is the best course of action as he believes the sale could be worth almost twice as much as the company's struggling stock is, a source with knowledge of the matter told New York Post.

Regardless, the controlling Carlson family apparently isn't interested in Gabelli's advice, though the company's Chairman LeRoy Carlson Jr. recently did agree to go on a road show with the firm's largest investor and meet representatives of several hedge funds who might be interested in acquiring US Cellular. The famous entrepreneur was reportedly convinced Carlson Jr. will agree to sell the company, a sentiment that was outlined in a March report of his investment company that said there's a realistic chance that a significant portion of US Cellular's assets will be monetized in the not too distant future. Gabelli and other investors sharing his thoughts were optimistic about the future seeing how they're estimating that the Chicago, Illinois-based mobile service provider boasts a net asset value of approximately $6 billion, or $71 per share.

While Carlson Jr. reportedly entertained Gabelli's suggestion to sell the company, the member of the founding Carlson family dropped the idea in the middle of their recent road show, a source with knowledge of the matter claims. It's currently unclear whether Gabelli will try to lobby for a sale at a later date, but as things stand right now, it seems unlikely that US Cellular will be on the market for a takeover anytime soon. The founding Carlson keeps a tight grasp on the company through Telephone & Data Systems, a separate entity that owns 73 percent of US Cellular. While the family holds only approximately 10 percent of TDS shares, its super-majority voting rights allow it to stay in charge of TDS and — consequently — US Cellular.

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