CINCINNATI, March 13, 2020 /PRNewswire/
-- Cincinnati Bell Inc. (NYSE:CBB) ("Cincinnati Bell"
or "the Company"), together with Macquarie Infrastructure Partners
("MIP"), today announced an agreement through which a
MIP-controlled subsidiary will acquire all outstanding shares of
Cincinnati Bell for $15.50 per share
in a cash transaction valued at approximately $2.9 billion, including debt (the "Transaction").
MIP is a fund managed by Macquarie Infrastructure and Real Assets
("MIRA"). Certain Special Opportunities funds ("Ares Funds")
managed by the Private Equity Group of Ares Management Corporation
(NYSE: ARES) ("Ares Management") have agreed to provide equity
financing for the Transaction.
Pursuant to the agreement, each issued and outstanding share of
Cincinnati Bell common stock will be converted into the right to
receive $15.50 in cash at closing of
the Transaction. The Transaction price of $15.50 per share of Cincinnati Bell common stock
represents a 101% premium to the closing per share price of
$7.72 on December 20, 2019, the last trading day prior to
the date when Cincinnati Bell's original merger agreement with
Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) ("Brookfield") was executed, a 172% premium to
the 60-day volume weighted average price up to and including
December 20, 2019 and a 7% premium to
Brookfield's prior binding
agreement to acquire the Company.
The Transaction follows the determination by Cincinnati Bell's
Board of Directors, after consultation with its legal and financial
advisors, that the MIP proposal constituted a "Superior Proposal"
as defined in Cincinnati Bell's previously announced merger
agreement with Brookfield.
Consistent with that determination and following the expiration of
the negotiation period during which Brookfield declined to propose an amendment to
the merger agreement, Cincinnati Bell terminated that agreement. In
connection with the termination, Cincinnati Bell has paid
Brookfield a $24.8 million break-up fee.
Lynn A. Wentworth, Chairman of
the Cincinnati Bell Board of Directors, said, "After carefully
evaluating MIP's revised offer, we are confident that this
transaction is in the best interest of Cincinnati Bell and its
shareholders. Importantly, the new transaction price of
$15.50 per share represents a 7%
increase from our previous merger agreement with Brookfield at $14.50 per share and a 101% premium to Cincinnati
Bell's closing per share price of $7.72 on December 20,
2019, the last trading day prior to the date when the
original merger agreement with Brookfield was entered into. This underscores
the robust and disciplined process that we executed to ensure
immediate and maximum value creation for our shareholders."
Leigh Fox, President and Chief
Executive Officer of Cincinnati Bell, continued, "This transaction
with MIP represents an exciting opportunity to enhance our
financial position and expand our resources to better serve our
customers. MIP exhibits deep telecommunications expertise and a
strong track record of investing in capital intensive businesses,
which will be critical as we deliver on our strategy to drive next
generation, integrated communications through an expanded fiber
network as well as our IT services platform. We firmly believe this
transaction will allow us to enhance our services and drive
long-term value for our customers in Hawaii, Ohio,
Kentucky, and Indiana, and across North America."
"Given the significant investment that the Company has made into
its fiber network, Cincinnati Bell represents a truly
differentiated platform compared to other network
providers," said Karl Kuchel, Chief Executive Officer of MIP. "We
are pleased to partner with the experienced management team to
continue to expand the fiber footprint and bring high bandwidth
connectivity to homes and businesses in the Company's service
territories. The investment in Cincinnati Bell represents an
exciting addition to our portfolio of fiber and communications
infrastructure assets, both in the United
States and globally."
"On behalf of the Ares Special Opportunities funds, we are
excited to partner with two world class organizations in Cincinnati
Bell and MIRA," said Scott Graves,
Partner, Co-Head of Private Equity and Head of Special
Opportunities.
MIRA is one of the world's leading alternative asset managers
and a highly experienced investor in the communications
infrastructure industry. For more than two decades, MIRA has
partnered with investors, governments and communities to manage,
develop and enhance assets relied on by more than 100 million
people each day. As of September 30,
2019, MIRA managed $135.6
billion in assets that are essential to the sustainable
development of economies and communities, including; 155 portfolio
businesses, ~600 properties and 4.7 million hectares of farmland.
For more information, go to www.mirafunds.com.
Ares Management is a leading global alternative investment
manager operating three integrated businesses across Credit,
Private Equity and Real Estate. Ares Management's global platform
had $149 billion of assets under
management as of December 31, 2019
and employs approximately 1,200 employees in over 20 offices in
more than 10 countries. Please visit www.aresmgmt.com for
additional information.
The Transaction, which is expected to close in the first half of
2021, is subject to certain customary closing conditions, including
the approval by Cincinnati Bell's shareholders, expiration or
termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and receipt of certain other
regulatory approvals. Cincinnati Bell will file a current report on
Form 8-K with the U.S. Securities and Exchange Commission
containing a summary of the terms and conditions of the proposed
acquisition as well as a copy of the merger agreement.
Advisors
Morgan Stanley & Co. LLC and Moelis & Company LLC are
acting as financial advisors to Cincinnati Bell and Cravath, Swaine
& Moore LLP, Morgan, Lewis & Bockius LLP, and BosseLaw PLLC
are acting as legal advisors to Cincinnati Bell.
The Bank Street Group LLC is acting as the financial advisor to
MIP, Goldman Sachs & Co LLC is leading the financing
arrangements, and White & Case LLP is serving as lead legal
advisor. Sullivan & Cromwell LLP is acting as legal advisor to
the Ares Funds.
About Cincinnati Bell Inc.
With headquarters in Cincinnati,
Ohio, Cincinnati Bell Inc. (NYSE: CBB) delivers integrated
communications solutions to residential and business customers over
its fiber-optic and copper networks including high-speed internet,
video, voice and data. Cincinnati Bell provides service in areas of
Ohio, Kentucky, Indiana and Hawaii. In addition, enterprise customers
across the United States and
Canada rely on CBTS and OnX,
wholly owned subsidiaries, for efficient, scalable office
communications systems and end-to-end IT solutions. For more
information, please visit www.cincinnatibell.com. The information
on Cincinnati Bell's website is not incorporated by reference in
this press release.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Cincinnati Bell by MIRA. In
connection with the proposed acquisition, Cincinnati Bell intends
to file relevant materials with the United States Securities and
Exchange Commission ("SEC"), including Cincinnati Bell's proxy
statement in preliminary and definitive form. Shareholders of
Cincinnati Bell are urged to read all relevant documents filed with
the SEC, including Cincinnati Bell's proxy statement when it
becomes available, because they will contain important information
about the proposed merger and the parties to the proposed
merger. Investors and shareholders are able to obtain the
documents (once available) free of charge at the SEC's website
at www.sec.gov, or free of charge from Cincinnati Bell at
investor.cincinnatibell.com or by directing a request to Cincinnati
Bell's Investor Relations Department at 1-800-345-6301 or
investorrelations@cinbell.com.
Participants in the Solicitation
Cincinnati Bell and its directors, executive officers and other
members of management and employees, under SEC rules, may be deemed
to be "participants" in the solicitation of proxies from
shareholders of Cincinnati Bell in favor of the proposed merger
with MIRA. Information about Cincinnati Bell's directors and
executive officers is set forth in Cincinnati Bell's Proxy
Statement on Schedule 14A for its 2019 Annual Meeting of
Shareholders, which was filed with the SEC on March 19, 2019, and its Annual Report on Form
10-K for the fiscal year ended December 31,
2019, which was filed with the SEC on February 24, 2020. These documents may be
obtained free of charge from the sources indicated above.
Additional information regarding the interests of these
participants which may, in some cases, be different than those of
Cincinnati Bell's shareholders generally, will also be included in
Cincinnati Bell's proxy statement relating to the proposed merger
with MIRA, when it becomes available.
Cautionary Statement Regarding Forward-Looking
Statements
Certain of the statements in this communication contain
forward-looking statements regarding future events and results that
are subject to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical facts, are statements that could be
deemed forward-looking statements. These statements are based on
current expectations, estimates, forecasts, and projections about
the industries in which we operate and the beliefs and assumptions
of our management. Words such as "expects," "anticipates,"
"predicts," "projects," "intends," "plans," "believes," "seeks,"
"estimates," "continues," "endeavors," "strives," "will," "may,"
"proposes," "potential," "could," "should," "outlook," or
variations of such words and similar expressions are intended to
identify such forward-looking statements. In addition, any
statements that refer to projections of future financial
performance, anticipated growth and trends in businesses, and other
characterizations of future events or circumstances are
forward-looking statements. Readers are cautioned that these
forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties, which
could cause actual results to differ materially and adversely from
those reflected in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not
limited to: (i) the risk that the proposed merger with MIRA may not
be completed in a timely manner or at all; (ii) the failure to
receive, on a timely basis or otherwise, the required approval of
the proposed merger with MIRA by Cincinnati Bell's shareholders;
(iii) the possibility that competing offers or acquisition
proposals for Cincinnati Bell will be made; (iv) the possibility
that any or all of the various conditions to the consummation of
the merger 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); (v) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger, including in circumstances which would
require Cincinnati Bell to pay a termination fee or other expenses;
(vi) the effect of the announcement or pendency of the merger on
Cincinnati Bell's ability to retain and hire key personnel, its
ability to maintain relationships with its customers, suppliers and
others with whom it does business, or its operating results and
business generally; (vii) risks related to diverting management's
attention from Cincinnati Bell's ongoing business operations;
(viii) the risk that shareholder litigation in connection with the
merger may result in significant costs of defense, indemnification
and liability and (ix) (A) those discussed in Cincinnati Bell's
Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and, in particular, the risks
discussed under the caption "Risk Factors" in Item 1A, and (B)
those discussed in other documents Cincinnati Bell filed with the
SEC. Actual results may differ materially and adversely from those
expressed in any forward-looking statements. Cincinnati Bell
undertakes no, and expressly disclaims any, obligation to revise or
update any forward-looking statements for any reason, except as
required by applicable law.
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SOURCE Cincinnati Bell Inc.