Industry Telecommunications Founded 1900 Subsidiaries Central Telephone | Founder Max McGraw Ceased operations 1993 Parent organization CenturyLink | |
Predecessor Central West Public Service Co, Western Power & Gas, Central Telephone and Utilities Corp. Defunct 1993 (Acquired by Sprint) Area served North Carolina, Virginia, Illinois, Florida, Texas, Ohio, Minnesota, Iowa, Nevada Products Telephone, Cable Television, Wireless Divisions Central Telephone Company
Central Telephone Company of Virginia
Central Telephone Company of Texas Headquarters Chicago, Illinois, United States | ||
1989 centel first cell phone ad
Centel Corporation was an American telecommunications company, with primary interests in providing basic telephone service, cellular phone service and cable television service. In 1926, Max McGraw consolidated his telephone utility holdings previously acquired during the 1920s to create Central Telephone Company. Simultaneously, McGraw's other utility interests were combined to form Central West Public Service Company, the parent company that would eventually become Centel Corporation in 1982.
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Centel provided telephone service through its Central Telephone Company subsidiary. Its largest coverage areas by lines installed were Las Vegas, two Chicago suburbs (Des Plaines and Park Ridge), Tallahassee, FL and Charlottesville, VA. It was, until the breakup of AT&T in 1984, the fifth largest telephone company in the United States after AT&T, GTE, United Telecom and Contel.
Centel was purchased by Sprint in 1993 for approximately $3 billion in Sprint common stock. Centel's stock was trading at $42.50 per share on the New York Stock Exchange just before the merger announcement in May 1992, but the cash value of the deal (commonly referred to as a "takeunder") worked out to be only $33.50 per share of Centel stock. After a bitter battle with dissident shareholders who believed the company was worth more, the merger was ultimately approved by a very narrow majority with 50.5% of the outstanding shares voting for the merger.
Centel had consolidated revenues of $1.2 billion in 1991. At the time of its 1993 purchase by Sprint, Centel provided local telephone service to 1.5 million telephone lines in seven states and was also the 10th largest cellular company with operations in 22 states. It had 9,300 employees. It had previously sold its Cable Operations in 1989 and its Electric operations in 1991.
Ironically, Sprint didn't end up keeping either of Centel's businesses (cellular and local telephone service) that it acquired. The cellular operations were spun off in 1996 so Sprint could instead focus on providing Sprint PCS cellular service. The local telephone operations were spun off (after being combined with Sprint's own local telephone operations) in 2006 (see below).