Alltel Corp. stocks were up by nearly $5 late Monday morning on news that the company will be bought by two private equity firms for $27.5 billion.

The deal marks the largest leveraged buyout of a telecom company. Little Rock, Ark.-based Alltel is the fifth-largest wireless carrier in the United States. It also owns the largest network in terms of geography.

TPG Capital and GS Capital Partners on Sunday announced that they will acquire all of Alltels outstanding common stock for $71.50 per share in cash. Alltel said it intends to pay its regular quarterly common share dividend until closing, which is expected to occur by the fourth quarter of 2007 or first quarter of 2008. After that, the company will be privately held.

Alltel’s board unanimously approved the merger agreement and has asked shareholders to do the same. Shareholders will vote on the proposed transaction at a special meeting whose date has not yet been announced.

“TPG and GSCP are long-term investors who are willing to make the investments necessary to continue to grow our wireless business in all of our markets, Alltel CEO Scott Ford who will remain in that position said in a news release.

Merrill Lynch & Co., Stephens Inc. and JP Morgan Securities Inc. acted as Alltel’s financial advisers, and Wachtell, Lipton, Rosen & Katz acted as legal adviser. Citigroup and Goldman Sachs acted as financial advisers to TPG and GSCP; Cleary Gottlieb Steen & Hamilton LLP acted as legal adviser to TPG; Weil Gotshal & Manges LLP acted as legal adviser to GSCP, and Akin Gump Strauss Hauer & Feld LLP acted as regulatory counsel to the buyers. Acquisition financing will be provided by Goldman Sachs, Citigroup, Barclays and RBS.

TPG Capital is the global buyout group of TPG, a private investment firm founded in 1992. Its investments run the gamut from communications and technology to healthcare and media. GS Capital Partners is the private equity arm of Goldman Sachs.

Alltel Corp. www.alltel.com
GS Capital Partners www.goldmansachs.com   
TPG Capital www.tpg.com