Today: April 20, 2024
Today: April 20, 2024

Consolidated Communications shareholder Wildcat opposes $3.1 billion take-private deal

Share This
LA Post: Consolidated Communications shareholder Wildcat opposes $3.1 billion take-private deal
Reuters
Anirban Sen
November 03, 2023

By Anirban Sen

NEW YORK (Reuters) - Wildcat Capital Management, a top shareholder in Consolidated Communications Holdings, said on Friday it plans to vote against its $3.1 billion takeover by an investor consortium, as it undervalues the broadband services provider.

Wildcat, which owns about 3 million shares and is the fifth-largest shareholder in Consolidated Communications, said in a letter to the Mattoon, Illinois-based company's board that it believes a value of at least $4 billion, including debt, would be meritied. This would represent a nearly 30% premium to the deal price of $4.70 per share.

"Wildcat continues to believe in the strategic value of the assets assembled by CNSL and the Company's strong potential as a standalone entity, and called for CNSL to terminate the agreement if a higher price cannot be negotiated," Tom McConnon, head of Wildcat's public equities arm, wrote in the letter, a copy of which Reuters has seen.

In October, Consolidated Communications agreed to be bought by an investor group comprising Searchlight Capital Partners And British Columbia Investment Management Corp, months after the group had first submitted an offer to buy the company. Reuters reported in July that Wildcat asked Consolidated Communications to reject the offer.

Consolidated Communications did not immediately respond to a request for comment.

Wildcat argued that mature fiber and cable operators have historically been valued at 10 to 15 times earnings before interest, taxes, depreciation and amortization (EBITDA) by acquirers, whereas Consolidated Communications' take-private deal valued the company at about six times of cash flow.

Wildcat also argued the debt market for fiber assets has become more attractive this year and mature fiber businesses can be levered to about 8.5 times annual revenue growth rates, adding that Frontier Communications' recent debt deal support its valuation estimates of nearly $4 billion, or $10.70 per share.

"We believe that the vast majority of CNSL's normalized EBITDA is residential fiber-to-the-home or commercial fiber, not legacy voice," McConnon said.

(Reporting by Anirban Sen in New York; Editing by Rashmi Aich)

Popular

Live video of man who set himself on fire outside court proves challenging for news organizations

A man who set himself on fire outside the Manhattan courtroom where Donald Trump was on trial tested news organizations on how quickly they could respond to an incident and what to show viewers

Mandisa, Grammy-winning singer and 'American Idol' alum, dies at 47

Contemporary Christian singer Mandisa, who appeared on “American Idol” and won a Grammy for her 2013 album “Overcomer,” has died

Coyotes' move to Salt Lake City elicits opposing responses in 2 cities

NHL Commissioner Gary Bettman sat next to the former Arizona Coyotes owner in a downtown Phoenix hotel meeting room, trying to put a positive spin on the funeral for a franchise

Taylor Swift drops 15 new songs on double album, 'The Tortured Poets Department: The Anthology'

Could there be a Taylor Swift new album rollout without a few additional surprises

Related

Panama Papers trial's public portion comes to an unexpectedly speedy end

UAW clinches watershed union victory at Volkswagen Tennessee factory

Here’s how Phish is using the Sphere's technology to give fans something completely different

Nike to lay off 740 employees at Oregon headquarters

- Advertisement -
Advertisement: Limited Time Offer