Leading Independent Proxy Advisory Firm ISS Recommends Consolidated Communications Shareholders Vote “FOR” the Proposed Transaction with Searchlight and BCI
January 19 2024 - 8:00AM
Business Wire
Consolidated Urges Shareholders to Vote FOR the
Proposed Transaction Today
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the
“Company” or “Consolidated”), a top 10 fiber provider in the U.S.,
today announced that a leading independent proxy advisory firm,
Institutional Shareholder Services (“ISS”), has recommended that
Consolidated shareholders 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 Company’s special meeting of shareholders (the “Special
Meeting”) to vote on the Proposed Transaction is scheduled for
January 31, 2024. Consolidated urges its shareholders to vote FOR
the Proposed Transaction today.
Consolidated issued the following statement regarding the ISS
recommendation to vote FOR the Proposed Transaction:
“We are pleased ISS recognizes that the
Proposed Transaction maximizes the value our shareholders can
receive by eliminating the risk they would bear should Consolidated
remain a standalone company. The Proposed Transaction provides our
shareholders with significant and certain value for their
investments.”
In recommending that Company shareholders vote FOR the Proposed
Transaction, ISS stated1:
- “The frustration of long-term shareholders who have experienced
a substantial decline in share value over a period of significant
infrastructure investment by the company is understandable. At the
same time, there is an immediate and sizable downside risk in
rejecting the deal. Moreover, management's ability to execute on
its projected plan seems far from assured, as the plan leaves
little margin for error and any underperformance could force the
company to raise further capital, an expensive and likely dilutive
proposition for shareholders. In light of these factors, support
for the proposed transaction is warranted.”
- “CNSL's outperformance against the broader market index and the
median of its peers since the unaffected date indicates a potential
downside risk of non-approval. From the release of its Q4 2022
earnings on Feb. 28, 2023 through the April 12, 2023 unaffected
date, CNSL traded at a median of $2.54 per share, and the company
estimates that if the deal breaks it is likely that shares would
trade below the unaffected price of $2.76. Though it is difficult
to predict exactly where shares may trade if the deal breaks, it
does not appear unreasonable to expect shares to trade below $3.00
in the near term, and it would not be surprising to see shares
revert to the unaffected price.”
- “At the transaction announcement, the company stated the offer
implied a valuation of approximately 9.6x LTM EBITDA, equal to
approximately 8.6x EV/2024E adjusted EBITDA. Per information from
Bloomberg, the company traded at a median 7.6x EV/NTM EBITDA over
the 52 weeks before the unaffected date, while the company's
identified peers traded at a median of 7.0x EV/NTM EBITDA over the
same period. These factors lend support to the company's argument
that the premium being offered to shareholders is attractive.”
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.
____________________ 1 Permission to use quotations from ISS was
neither sought nor obtained.
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/20240118254136/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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