Gabelli’s firm thought it was close to persuading Chairman LeRoy Carlson Jr. to sell a few weeks ago when it took him on a road show to meet hedge funds, two sources with direct knowledge of the road show said.
The optimism was outlined in a March 16 Gabelli & Co. report.
“There is a 50 percent probability of [US Cellular] or a meaningful portion of its assets to be monetized over the medium term,” the report said.
Gabelli said in the report the net asset value of US Cellular was $6 billion, equal to $71 per share.
Despite the upbeat report and the fact that Carlson — a member of the US Cellular founding family — agreed to the road show, the executive, in the middle of the road show, dismissed the idea of selling the business, a source who met with Carlson said.
Carlson-family controlled Telephone & Data Systems, a separately listed company, owns 73 percent of US Cellular shares.
The family owns roughly a 10 percent stake in TDS, but controls it through super-majority voting rights and thus also controls US Cellular.
Verizon in late 2007 made a $100 a share offer for TDS, sources said, that was rebuffed.
TDS shares closed Friday at $26.31.
Gabelli Asset Management owns 4.2 million US Cellular shares, and 6.4 million TDS shares, which together are worth about $300 million, making it a top 10 Gabelli holding.
The firm has owned more than 4 million shares in US Cellular since 2005, when the stock was above $50 a share.
Gabelli declined comment, and US Cellular did not return calls.