Consolidated Communications’ (Nasdaq: CNSL) board of directors is considering a non-binding offer, dated April 12, 2023, from Searchlight Capital Partners, L.P. and British Columbia Investment Management Corp. (a.k.a. the “Searchlight Group”), to acquire all of the outstanding common shares of the service provider that the bidders don’t already own. The Searchlight Group has offered $4.00 per share, a total of approximately $310 million, in cash for those shares.
Consolidated Communications’ stock closed April 12 at $2.76. The following day the stock closed at $3.83.
Searchlight already owns 34.3% of its target’s outstanding common shares, based on their most recent Schedule 13D filing dated the same day as the proposal letter. Its proposal for the remaining shares states the purchase would be subject to the approval and recommendation by a special committee of independent and disinterested directors, advised by independent legal and financial advisors. The deal also would be subject to a non-waivable condition that requires approval of the deal by a majority of the other stockholders.
The Consolidated board has revealed plans for the creation of a review committee as outlined in the proposal letter. The company notes that the board also will evaluate any other proposals that may come its way as well as “other strategic alternatives that may be available to the Company.”
Consolidated provides a variety of wireline and wireless residential and business services in 22 states, principally via its Fidium Fiber unit. It operates a network of more than 58,000 fiber route miles. Its footprint expanded considerably when it purchased Fairpoint Communications in 2017 (see “Consolidated Communications to buy FairPoint, sells enterprise/IT services equipment biz”). However, it has shed several assets in the intervening years, particularly as part of a recently strategic review of assets (see, for example, “Consolidated Communications to sell Ohio networks to Middle Point Home Telephone” and “Consolidated Communications to sell Kansas City assets to Alinda Capital Partners”).
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