Consolidated Communications Shareholders Approve Proposed Transaction with Searchlight and BCI
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) announced the approval of its acquisition by affiliates of Searchlight Capital Partners, L.P. and British Columbia Investment Management Corporation. Approximately 75% of disinterested shareholders voted to approve the merger agreement and the Proposed Transaction. The acquisition is expected to close by the first quarter of 2025, and after that, shares of Consolidated Communications common stock will no longer be traded or listed on any public securities exchange.
The approval by Consolidated Communications Holdings shareholders to proceed with the acquisition by Searchlight Capital Partners and British Columbia Investment Management Corporation represents a significant shift in the company's ownership structure. This change is pivotal as it often signals a strategic redirection, which could influence the competitive landscape within the telecommunications sector. The overwhelming support suggests that shareholders believe in the merits of the acquisition, likely due to the promise of enhanced financial flexibility and access to capital.
For the industry, this acquisition could mean increased investment in infrastructure, particularly in rural areas where Consolidated has indicated a focus. This might lead to a positive ripple effect on local economies due to improved connectivity and potential job creation. However, it's essential to monitor how this acquisition impacts the company's service quality and pricing, as these are critical factors for customer retention and market growth.
The transaction's structure, which notably does not include a financing condition, implies confidence in the deal's completion without the need for additional funding arrangements. This aspect could be reassuring to investors, as it reduces the risk of delays or complications related to securing funds. The fact that shares of Consolidated Communications will no longer be publicly traded post-acquisition is significant for current shareholders, as it will affect their liquidity and exit options. They will need to consider the acquisition's terms and the timing of the closure to strategize their investment decisions.
From a financial perspective, the transaction's success hinges on the post-merger integration process and the realization of any projected synergies. It is crucial to evaluate the potential for cost savings, revenue enhancements and the long-term return on investment, especially given the strategic intent to expand broadband services in underserved areas, which may require substantial capital expenditures.
With the transaction pending customary closing conditions and regulatory approvals, there is a window in which legal and regulatory hurdles could arise. The telecommunications industry is heavily regulated and the acquisition will be scrutinized to ensure compliance with antitrust laws and regulations designed to maintain market competition and consumer protection. The timeline for closure by the first quarter of 2025 suggests a lengthy regulatory process, possibly involving negotiations with regulatory bodies or adjustments to the deal structure to meet approval criteria.
Moreover, the role of legal advisors in such transactions is critical, as they navigate the complex legal environment to mitigate risks associated with the merger. The involvement of prominent legal firms indicates a thorough due diligence process and a strategic approach to legal compliance and risk management. Stakeholders should pay close attention to the filings with the U.S. Securities and Exchange Commission for certified voting results and any disclosures related to the regulatory review process.
01/31/2024 - 04:17 PM
MATTOON, Ill. --(BUSINESS WIRE)--
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company” or “Consolidated”), a top 10 fiber provider in the U.S. , today announced that, based on the preliminary vote count provided by its proxy solicitor following the Company’s special meeting of shareholders (the “Special Meeting”) held earlier today, Consolidated shareholders have voted overwhelmingly to approve the proposed acquisition of the Company by affiliates of Searchlight Capital Partners, L.P. (“Searchlight”) and British Columbia Investment Management Corporation (“BCI”) (the “Proposed Transaction”). Approximately 75% of disinterested shareholders voted to approve the proposal to adopt the merger agreement and approve the Proposed Transaction. Consolidated will file final, certified voting results on a Form 8-K with the U.S. Securities and Exchange Commission as soon as practicable.
“Today’s vote by Consolidated shareholders is a clear endorsement that they recognize the value-maximizing nature of this transaction,” said Robert J. Currey, the Chairman of the Consolidated Communications Board and the Special Committee Chair. “With the financial flexibility and access to capital this transaction provides, we will be well positioned to bring broadband services to underserved and unserved communities across rural America. We look forward to continuing to deliver for our stakeholders, including our customers and our employees, for many years to come.”
The Proposed Transaction is expected to close by the first quarter of 2025, subject to customary closing conditions, including receipt of regulatory approvals. The Proposed Transaction is not subject to a financing condition. Following the closing of the Proposed Transaction, shares of Consolidated Communications common stock will no longer be traded or listed on any public securities exchange.
Advisors
Rothschild & Co is acting as financial advisor to the special committee and Cravath, Swaine & Moore LLP is acting as its legal counsel. Latham & Watkins LLP is providing legal counsel to Consolidated Communications.
About Consolidated Communications
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) is dedicated to moving people, businesses and communities forward by delivering the most reliable fiber communications solutions. Consumers, businesses and wireless and wireline carriers depend on Consolidated for a wide range of high-speed internet, data, phone, security, cloud and wholesale carrier solutions. With a network spanning nearly 60,000 fiber route miles, Consolidated is a top 10 U.S. fiber provider, turning technology into solutions that are backed by exceptional customer support.
Forward-Looking Statements
Certain statements in this communication are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, the Company’s current expectations, plans, strategies and anticipated financial results.
There are a number of risks, uncertainties and conditions that may cause the Company’s actual results to differ materially from those expressed or implied by these forward-looking statements, including: (i) the risk that the Proposed Transaction may not be completed in a timely manner or at all; (ii) the possibility that any or all of the various conditions to the consummation of the Proposed Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iii) the possibility that competing offers or acquisition proposals for the Company will be made; (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the Proposed Transaction, including in circumstances which would require the Company to pay a termination fee; (v) the effect of the announcement or pendency of the Proposed Transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; (vi) risks related to the Proposed Transaction diverting management’s attention from the Company’s ongoing business operations; (vii) the amount of costs, fees and expenses related to the Proposed Transaction; (viii) the risk that the Company’s stock price may decline significantly if the Proposed Transaction is not consummated; (ix) the risk of shareholder litigation in connection with the Proposed Transaction, including resulting expense or delay; and (x) (A) the risk factors described in Part I, Item 1A of Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and (B) the other risk factors identified from time to time in the Company’s other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov .
Many of these circumstances are beyond the Company’s ability to control or predict. These forward-looking statements necessarily involve assumptions on the Company's part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “should,” “may,” “will,” “would” or similar expressions. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this communication. Furthermore, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to the Company and speak only as of the date they are made. The Company disclaims any intention or obligation to update or revise publicly any forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240131885867/en/
Philip Kranz, Investor Relations
Philip.kranz@consolidated.com
Jennifer Spaude, Media Relations
Jennifer.spaude@consolidated.com
Source: Consolidated Communications
What is the ticker symbol for Consolidated Communications Holdings, Inc.?
The ticker symbol for Consolidated Communications Holdings, Inc. is CNSL.
What was the outcome of the vote for the proposed acquisition?
Approximately 75% of disinterested shareholders voted to approve the merger agreement and the Proposed Transaction.
When is the expected closing date for the acquisition?
The acquisition is expected to close by the first quarter of 2025.
What will happen to shares of Consolidated Communications common stock after the acquisition?
After the closing of the Proposed Transaction, shares of Consolidated Communications common stock will no longer be traded or listed on any public securities exchange.
