CIRI officials plan for possible shareholder dividend

ANCHORAGE (AP) -- Officials at Cook Inlet Region Inc. are trying to dampen rising expectations among shareholders that the Alaska Native corporation is preparing to pay them a large dividend.

Responding to phone calls and e-mails from shareholders asking about a potential $838 million windfall that Anchorage-based CIRI may reap from its investments in wireless communications, company president and chief executive Carl Marrs sent a letter to shareholders last month urging them to sit tight.

''The bottom line, for those of you who are hoping for details about a special distribution, is that we don't yet know whether we'll be able to do anything this year,'' Marrs wrote. He repeated that message in the most recent shareholder newsletter.

But Marrs also said that if the Federal Communications Commission on Dec. 13 approves CIRI's request to convert its partnership interest in VoiceStream Wireless Corp. into 7.5 million shares of VoiceStream stock, it would be a ''tremendous win'' for CIRI.

Marrs said since he started working at CIRI nearly three decades ago, he's been looking to score a ''home run'' for the company.

''This may be it,'' he said.

If the FCC approves the transfer, as CIRI officials expect it to, the 15-member board of the Anchorage corporation must decide whether to cash out some amount of VoiceStream stock to distribute among the nearly 7,000 shareholders.

While Marrs is warning shareholders to temper their expectations, he's also hinting that a sizable distribution is possible.

''If we can grow the company and make a large payout, that's what I'd like to do,'' Marrs said. He will make a recommendation to the board at its meeting Dec. 15.

Since 1997, Cook Inlet Region has invested $125 million in Bellevue, Wash.-based VoiceStream, one of the nation's leading providers of wireless communication, said Mark Kroloff, CIRI senior vice president and general counsel.

If the FCC chooses not to approve the transfer, CIRI will pursue other options, including an appeal for help from the Alaska congressional delegation, Marrs said. Assuming the deal wins approval, the company will face a classic investment decision: to sell the stock or hold on to it hoping for a better price, Kroloff said.

VoiceStream's stock price closed at $111.69 a share on the Nasdaq stock market Monday, down from a 52-week high of $161 in July.

Looming over the value of VoiceStream stock is a pending takeover by German telecommunications giant Deutsche Telekom. In July, Deutsche Telekom announced it was acquiring VoiceStream for $50.7 billion. Under the deal, which is also pending FCC approval, each VoiceStream share would be converted into 3.2 shares of Deutsche Telekom plus $30.

Under that scenario, VoiceStream shares could be worth more after the takeover than they are today, so it may make sense for CIRI to wait to cash out its VoiceStream stock until after the takeover occurs, Marrs said.

But there are risks in that approach too, he said, that the CIRI board will have to weigh. U.S. Sen. Ernest Hollings, D-S.C., has urged regulators to block the deal, saying it could threaten national security and hurt U.S. competitors.

If the takeover falls apart, or if the U.S. economy goes into a recession, it would be advantageous for CIRI to cash out some of its VoiceStream stock sooner, Marrs said.

''I'm not even going to attempt to guess what the board will do,'' said Marrs.