September 10, 2024 | Telecom | North America | Active
On 5-Sep-24, Verizon agreed to acquire communications provider Frontier, for $38.50 per share in cash, in a move aimed at bolstering Verizon’s competitive position and expanding its fibre-optic network nationwide.
The offer values Frontier’s enterprise at $20bn and represents a 37.3% premium over Frontier’s closing price from the previous day. The boards of both Verizon and Frontier have unanimously approved the transaction, expected to close within 18 months, pending approval from Frontier shareholders (50%) – though no Verizon vote is required – and regulatory clearances, including under HSR, from the Federal Communications Commission (FCC), “Team Telecom”, various state public utility commissions (“PUCs”, with only California named), and local franchise authorities. Preliminary proxy is expected to be filed within 20 business days, by 2-Oct-24.
The merger agreement includes customary provisions on representations, warranties, covenants, and MAC clauses, with specific carve-outs for events like war and pandemics.
Frontier is bound by a “no-shop” clause, albeit with fiduciaryout exceptions. Verizon retains the right to propose revised terms during a match-right period. Both companies are
required to use “reasonable best efforts” to secure regulatory approvals, which may involve offering structural or behavioural remedies, except where doing so would trigger a burdensome condition – defined as any remedy that could reasonably be expected to have a material adverse effect on either Frontier or Verizon’s business. The termination fee is $320m and RTF is $590m. On timing, FCC and PUC applications are expected ...
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