UPDATE: Stifel Nicolaus Sees Possibility of Bidding War for Alltel (AT)

UPDATE: Stifel Nicolaus comments on the WSJ story suggesting private equity firms are beginning to circle Alltel (NYSE: AT). The firm notes that a buyout has been a key part of their thesis since the spin-off of the company's wireline assets earlier this year. The firm says the company is a very attractive acquisition target for either private equity, or a strategic player such as Verizon Wireless (NYSE: VZ) (NYSE: VOD) or Sprint Nextel (NYSE: S).

The firm said a possibility exists of a potential bidding war between interested parties and believes valuations could climb to as high as $85/share in a competitive bidding environment.

The firm maintains its Buy rating and $68 price target and said the stock remains its top US-based stock.