US Cellular closes Sprint deal, announces dividend

CHICAGO (AP) -- United States Cellular Corp., the sixth-largest cellphone carrier in the country, on Friday closed on the sale of some of its Midwestern markets to No. 3 Sprint Nextel Corp. and announced that it's handing over the proceeds to shareholders through a special dividend.

Chicago-based U.S. Cellular said the dividend of $5.75 per share, or a total of $481 million, will be paid June 25 to shareholders of record on June 11.

Its shares jumped by $1.89, or 5 percent, to close at $39.70. Shares of parent company Telephone and Data Systems Inc. rose 3 percent amid a broad market rally.

U.S. Cellular agreed in November to sell its space on the airwaves and the contracts covering 585,000 customers in Illinois, Indiana, Michigan, Missouri and Ohio. That's about 10 percent of U.S. Cellular's customer base and includes its key Chicago and St. Louis markets. The rest of its network spans states that include Wisconsin, Iowa, Oregon, Maine and North Carolina.

U.S. Cellular shares fell when the sale was announced and haven't fully recovered, even with the special dividend, as investors were hoping the company would get more out of a prime market like Chicago.

Sprint said it has notified customers and is reaching out with offers to get them set up with Sprint phones.