TPG and Goldman Offload Alltel to Verizon for $28.1 Billion

Verizon has agreed to purchase Alltel for $28.1 billion, allowing private equity investors TPG and Goldman to flip their purchase just seven months after taking the wireless telecom firm private in a $27.5 billion deal.  Verizon can now boast of being the largest US wireless carrier, besting AT&T who currently holds the title.  Why would Goldman flip its investment for such a meager premium so soon after it purchased Alltel?  Because, along with Citigroup, it wound up stuck with the bulk of the leveraged loans used to finance the deal when credit markets soured.  Perhaps Goldman was willing to accept rotten returns in its private equity arm in order to lose the debt taking up valuable space on its balance sheet.  TPG can move on to pursue other deals at today's discounted private equity prices without having to worry that its investment in Alltel will suffer further due to its mountain of debt.  Citigroup's Vikram Pandit will need to take the guys at TPG and Goldman out to dinner.  If only it were this easy to get rid of the rest of the $400 billion in assets that Citi is looking to sell. 

Update on the deal specifics: TPG and Goldman are actually getting decent returns on this deal.  Verizon is paying $5.9 billion for Alltel's equity (TPG & GS put up $4.6 billion in equity to do the deal), and assuming its debt for $22.2 billion.  $13.8 billion of Alltel's term loans will be purchased at full face value, while $5 billion in short term bridge loans will be purchased at a 4% discount to face value.