WASHINGTON (AP) – AT&T Inc. has reached an agreement with the Justice Department and the Louisiana Attorney General to sell off assets in eight markets in Louisiana and Mississippi in order to proceed with its proposed $944 million acquisition of Centennial Communications Corp.
The Federal Communications Commission is continuing to review the wireless merger, which was announced late last year. Under the terms of the deal, Centennial stockholders will receive $8.50 per share in cash.
The Justice Department said it is requiring AT&T to divest Centennial assets in southwestern and central Louisiana and southwestern Mississippi in order to preserve competition in those markets. In May, AT&T agreed to sell certain Centennial wireless assets in five of the eight markets to Verizon Wireless for $240 million.
Dallas-based AT&T expects the Centennial deal to close early in the fourth quarter.
AT&T is the second-largest wireless carrier in the U.S., with nearly 80 million subscribers nationwide.
Centennial Communications has about 1.1 million wireless subscribers in six states, Puerto Rico and the Virgin Islands. Late Tuesday, the Wall, N.J.-based company reported income of $19.5 million, or 17 cents per share, on $258.9 million in revenue for its fiscal 2010 first quarter, which ended in August.
Centennial's shares rose 41 cents, or 5.1 percent, to close at $8.39 on Tuesday. AT&T's shares rose 30 cents to $25.90.
Meanwhile, AT&T Missouri has agreed to pay $1.4 million to settle a federal lawsuit alleging it violated the rules to receive school Internet contracts.
The Justice Department announced the settlement Tuesday. It has claimed the company, formerly known as Southwestern Bell Telephone, colluded with officials at the Kansas City school district to get contracts through the federal E-Rate Program.
The E-Rate Program provides money to poor schools and libraries for hardware and Internet connection fees. The money comes from fees on telephone bills.
Federal authorities got involved in the case in 2006 after American Fiber Systems Inc., an unsuccessful bidder for the project, filed suit. American Fiber is set to receive $195,000 from the settlement.
The school district has already settled the case.