Korva is a scroll of the internet’s best ideas.
The buyer's CEO was car-bombed
Apache spent the 1960s collecting businesses in fields from steel to ranching, and telephone companies were part of that. By 1966, its telephone holdings had grown to twelve of them. The plan was to put all the small telephone companies into one group and sell it to a larger telephone company.
The buyer was Continental Telephone, and its CEO, Phil Lucier, agreed with Apache's founder, Raymond Plank, on price and terms. Then Lucier ate lunch at a restaurant in St. Louis, got into his car in the parking lot, and turned the ignition key. The car blew up.
The cause and the people behind it were never determined. The car bomb appears to have targeted the wrong man.
Why did small telephone companies sell out?
Besides the Bell System, thousands of small independent telephone companies served mostly rural areas in the mid-twentieth century. Upgrading to dial service and building long-distance connections took heavy capital that small owners often lacked. Larger independents such as Continental Telephone, GTE, and United Telecommunications grew by purchasing many of them. GTE bought Continental Telephone, by then renamed Contel, in 1991.
How was a phone company's price set?
Telephone systems have long been valued by the number of access lines they serve, meaning the working connections to homes and businesses. Buyers also compare the price to annual cash flow, since subscribers pay recurring monthly fees. Regulated rates matter too, because state commissions limit what an independent telephone company can charge and earn. A system with growing lines in a state with favorable rate rulings commands more per line than a shrinking one.
More from Founders
