UScellular expects $22.50-$23.75 per share special dividend after T-Mobile sale

United States Cellular Corporation (NYSE: USM) announced its board of directors is expected to approve a special cash dividend of $1.950 billion to $2.075 billion following the closing of its wireless operations sale to T-Mobile US, Inc.

The expected dividend translates to $22.50 to $23.75 per Common Share and Series A Common Share. The board will set record and payment dates when the dividend is declared, according to the company's statement.

"We are pleased to provide additional clarity on the expected special dividend to UScellular shareholders, subject to the approval of the Board of Directors and contingent on the closing of the T-Mobile transaction," said Laurent Therivel, UScellular President and CEO. "We expect this to be the first of potentially several special dividends issued to shareholders as a result of our announced transactions."

The company provided a breakdown of the cash calculation starting with a $4.4 billion gross purchase price. After accounting for various adjustments including a $90 million contingent purchase price adjustment, $1.665 billion in senior notes assumed in an exchange offer, and $865 million in term loan repayments, the net cash available for distribution ranges from $1.950 billion to $2.075 billion.

Additional costs include a $275 million cash tax obligation, $150 million to $200 million in cash obligations to employees, and $25 million to $100 million in other adjustments and costs. The calculation includes $320 million in proceeds from a new term loan and $425 million in excess cash.

Telephone and Data Systems, Inc. (NYSE: TDS), which is expected to own approximately 81% of UScellular's equity at closing, will receive its proportional share of the special dividend.

The company also announced it intends to change its name to Array Digital Infrastructure, Inc. upon closing, with Doug Chambers serving as interim CEO of the post-closing business.

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