Shareholders will Avoid Risk and Maximize the
Value of their Shares by Voting FOR the Proposed Transaction
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the
“Company” or “Consolidated”), has mailed a letter to its
shareholders in connection with its upcoming special meeting of
shareholders (the “Special Meeting”) urging its shareholders to
vote “FOR” 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”). The Special Meeting is scheduled to be held on
January 31, 2024. Shareholders of record as of December 13, 2023,
are entitled to vote at the Special Meeting.
The full text of the letter mailed to shareholders follows:
December 27, 2023
Dear Fellow Shareholders,
You have an essential decision to make
regarding the value of your investment. In order to realize the
benefits of this value-maximizing transaction, the majority of our
independent shareholders must support the deal. This means that
your vote is extremely important, regardless
of the number of shares you own. Every vote counts and is critical
to the future of the Company. Not voting is the same as voting
against the transaction.
The board of directors of the Company (the
“Board”) strongly believes the $4.70 per share cash offer from
Searchlight and BCI is the best risk-adjusted outcome for
shareholders and urges that you vote “FOR” the Proposed
Transaction.
Proposed Transaction Offers
Financially Compelling and Certain Value
- $4.70 per share in cash eliminates the real risk that
shareholders face if the Company were to remain standalone
- 70% premium to Consolidated’s share price as of April
12, 20231
- 89% premium to one-month VWAP2
- 18% increase in price achieved through negotiations
following the initial bid from Searchlight and BCI
- Purchase price is higher than Consolidated’s stock price at
every point over the last year, even after Searchlight and
BCI’s initial bid was made public, which underscores the value of
this transaction
_________________
1 The last full trading day prior to submission of Searchlight
and BCI’s initial non-binding proposal. 2 Calendar day
volume-weighted average prices as of April 12, 2023.
Transaction Multiple is
Attractive Relative to Other Incumbent Communications
Provider Transactions
- The implied 9.6x LTM EBITDA multiple secured by the Special
Committee is higher than ANY incumbent communications provider
precedent transaction in a decade
- While the Special Committee was negotiating an increase in
price, other communications providers were experiencing a material
decline in value, with six of eight peers seeing share price
declines3
Special Committee Undertook a
Robust Evaluation of All Opportunities to Maximize Value for the
Company’s Shareholders
A special committee composed of independent
and disinterested directors, and advised by independent legal and
financial advisors (the “Special Committee”), completed a
comprehensive evaluation of Searchlight and BCI’s proposal, as well
as all other possible go-forward alternatives.
- The process was public and highly visible from the moment
Searchlight and BCI submitted their initial non-binding proposal to
the Board
- The Special Committee announced a formal review of all
potential strategic alternatives
- More than 35 Special Committee meetings were held to
consider the transaction and possible alternatives
- 0 parties expressed interest in bidding despite a long
and public process
Proposed Transaction Will
Transfer Any Execution Risks to Searchlight and BCI
Consolidated’s transition from copper DSL
lines to fiber is competitively critical, and there is significant
execution risk, especially given the deteriorating financing and
operating environment. We no longer have the liquidity to fund our
original growth plan, and time to market is imperative. Those who
are first to the market with fiber services will be able to take
and maintain a significant market share.
Following its extensive and thorough
review, the Board believes this transaction is critical for
Consolidated’s future and represents the best risk-adjusted outcome
for its shareholders.
Vote Your Shares to Maximize the
Value of Your Investment
As a Consolidated Shareholder,
Your Choice is Clear: Vote “FOR” Significant, Compelling and
Immediate Value.
The Special Meeting is fast approaching and
is being held on January 31, 2024. The Proposed Transaction will
deliver financially compelling and certain value to
shareholders.
Failure to vote FOR the Proposed
Transaction, including not voting at all, could result in the deal
failing and Consolidated’s share price falling to well below the
pre-announcement price. Maximize the value of your investment and
vote “FOR” the Proposed Transaction.
_________________
3 Share price returns for select peers reflect changes since
April 12, 2023, the day before Searchlight and BCI’s non-binding
offer was made public, through October 13, 2023, the last full
trading day prior to announcement of entry into the merger
agreement. Peers include Frontier Communications Parent, Inc.,
Lumen Technologies, Inc., Cable One, Inc., Shenandoah
Telecommunications Company, ATN International, WideOpenWest, Inc.,
Altice USA, Inc. and Charter Communications, Inc.
Shareholders with questions or who require assistance voting
their shares should contact Consolidated’s proxy solicitor, Morrow
Sodali. Shareholders may call toll-free: (800) 662-5200 or +1 (203)
658-9400 (international) or email CNSL@info.morrowsodali.com.
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 failure to
receive, on a timely basis or otherwise, the required approvals of
the Proposed Transaction by the Company’s stockholders; (iii) 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);
(iv) the possibility that competing offers or acquisition proposals
for the Company will be made; (v) 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; (vi) 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; (vii) risks related to
the Proposed Transaction diverting management’s attention from the
Company’s ongoing business operations; (viii) the amount of costs,
fees and expenses related to the Proposed Transaction; (ix) the
risk that the Company’s stock price may decline significantly if
the Proposed Transaction is not consummated; (x) the risk of
shareholder litigation in connection with the Proposed Transaction,
including resulting expense or delay; and (xi) (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.
Additional Information and Where to Find
It
This communication may be deemed to be solicitation material in
respect of the Proposed Transaction. The Special Meeting will be
held on January 31, 2024 at 9:00 A.M. Central Time, at which
meeting the stockholders of the Company will be asked to consider
and vote on a proposal to adopt the merger agreement and approve
the Proposed Transaction. In connection with the Proposed
Transaction, the Company filed relevant materials with the SEC,
including the Proxy Statement. The Company commenced mailing the
Proxy Statement and a proxy card to each stockholder of the Company
entitled to vote at the Special Meeting on December 18, 2023. In
addition, the Company and certain affiliates of the Company jointly
filed an amended transaction statement on Schedule 13e-3 (the
“Schedule 13e-3”). INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE
URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING
THE PROXY STATEMENT AND THE SCHEDULE 13E-3, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, SEARCHLIGHT AND BCI AND
THE PROPOSED TRANSACTION. Investors and stockholders of the Company
are able to obtain these documents free of charge from the SEC’s
website at www.sec.gov, or free of charge from the Company by
directing a request to the Company at 2116 South 17th Street,
Mattoon, IL 61938, Attention: Investor Relations or at tel: +1
(844) 909-2675.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231226699323/en/
Philip Kranz, Investor Relations +1 217-238-8480
Philip.kranz@consolidated.com
Jennifer Spaude, Media Relations +1 507-386-3765
Jennifer.spaude@consolidated.com
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