Verizon’s All-Cash Offer of $38.50 per Share
Provides Highly Attractive Value to Frontier Stockholders
Frontier’s Board of Directors Strongly
Recommends Stockholders Vote “FOR” the Proposed Acquisition by
Verizon
Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier”)
today posted on its investor relations website and filed with the
Securities and Exchange Commission an investor presentation
detailing the significant value the proposed acquisition by Verizon
Communications Inc. (NYSE, NASDAQ: VZ) (“Verizon”) creates for
Frontier stockholders. The investor presentation is available on
Frontier’s Investor Relations website.
Highlights from the presentation include:
- Verizon’s best and final all-cash offer of $38.50 per share is
highly attractive and creates significant value for stockholders,
reflecting a 37% premium to Frontier’s pre-announcement price and a
significant premium to all other measures of Frontier’s historical
stock performance.
- Frontier’s highly qualified Strategic Review Committee and
Board of Directors led a robust and exhaustive process to evaluate
its standalone plan and strategic options.
- The Strategic Review Committee and Board unanimously and
unequivocally believe the Verizon offer is in the best interests of
stockholders and recommends stockholders vote “for” the
transaction.
Superior Value for Frontier Stockholders
Verizon’s all-cash offer of $38.50 per share reflects a 66%
premium to Frontier’s volume-weighted average share price over the
past year, a 37% premium to its unaffected share price on September
3, 2024, and a 60% premium to when Frontier announced its strategic
review process on February 5, 2024. The all-cash consideration
provides certainty of value and immediate liquidity to Frontier
stockholders at close. This price exceeded nearly all analyst price
targets for Frontier prior to the deal, as well as the mid-points
of the DCF valuations prepared in connection with the fairness
opinions provided by PJT Partners and Barclays.
Comprehensive Board-Led Strategic Review Process
Frontier’s majority-independent Strategic Review Committee and
Board of Directors thoroughly explored and evaluated multiple
strategic alternatives including a sale, joint ventures, and
remaining independent and executing towards Frontier’s standalone
plan. The Board unanimously concluded that the transaction with
Verizon is in the best interest of Frontier stockholders. The
Strategic Review Committee and Board solicited interest from all
logical potential parties, including four strategic and 13
financial parties. This deliberate and competitive process resulted
in a 17% to 28% improvement in value from Verizon’s initial bid
range and a significant premium to the only other bidder. This
process resulted in an all-cash offer of $38.50, which represents a
54% improvement to the first indication of value received in
November 2023. As a result of this robust process, the Board
unanimously concluded that Verizon’s final offer of $38.50 per
share presents superior value over all other potential paths,
including Frontier’s ambitious standalone plan.
Transaction Addresses Sensitivities Inherent in Ambitious
Standalone Plan
Over the last four years, Frontier has made remarkable progress
in executing its ambitious strategy, expanding its fiber network
and growing its fiber revenues. However, small changes in
underlying value drivers can have a significant impact on the value
of the company’s standalone plan. This proposed transaction with
Verizon provides certainty against potential downside factors and
sensitivities tied to Frontier’s ambitious standalone plan,
including:
- Negative cash flows through 2027 and high leverage; additional
debt funding required to sustain Frontier’s fiber network build
plan, which may not be available at attractive terms
- Competition from cable and other broadband providers, including
FTTH overbuilders, as well as increased competition from converged
/ bundled wireline and wireless offerings
- Exposure to declining legacy services facing secular
headwinds
- Plan assumes status quo macroeconomic environment
Strategic Review Committee and Board Unanimously Believe that
the Verizon Transaction is in the Best Interests of
Stockholders
The Board has concluded through an exhaustive and competitive
process that the Verizon transaction is in the best interests of
Frontier stockholders. If the transaction is not approved, Frontier
stockholders may face immediate loss of stockholder value with no
assurance of equal or greater value in the future. Additionally,
there are no assurances that Verizon or any other bidder will
return with another offer.
The Board unanimously and unequivocally believes the Verizon
transaction is in the best interests of stockholders and strongly
recommends stockholders vote in favor of the transaction.
About Frontier
Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider
in the U.S. Driven by our purpose, Building Gigabit America®, we
deliver blazing-fast broadband connectivity that unlocks the
potential of millions of consumers and businesses. For more
information, visit www.frontier.com.
Important Additional Information and
Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Frontier by Verizon. In
connection with the proposed transaction, on October 7, 2024,
Frontier filed a definitive proxy statement with the SEC. INVESTORS
AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING FRONTIER’S PROXY STATEMENT
(IF AND WHEN AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
stockholders are or will be able to obtain the documents (if and
when available) free of charge either from the SEC’s website at
www.sec.gov or from Frontier’s Investor Relations website or by
contacting Frontier’s Investor Relations by e-mail at
ir@ftr.com.
Forward-Looking
Statements
This communication contains “forward-looking statements”
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements address
our expectations or beliefs concerning future events, including,
without limitation, statements that relate to the proposed
transaction. These statements are made on the basis of management’s
views and assumptions, as of the time the statements are made,
regarding future events and performance and contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
“may,” “will,” “would,” or “target.” Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain.
A wide range of factors could materially affect future
developments and performance, including but not limited to: (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 approval of the proposed transaction by
Frontier’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 Frontier 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 Frontier to pay a
termination fee; (vi) the effect of the announcement or pendency of
the proposed transaction on Frontier’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 Frontier’s ongoing business operations;
(viii) the amount of costs, fees and expenses related to the
proposed transaction; (ix) the risk that Frontier’s stock price may
decline significantly if the merger 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
Frontier’s most recent Annual Report on Form 10-K for the year
ended December 31, 2023 and (B) the other risk factors identified
from time to time in Frontier’s other filings with the SEC. Filings
with the SEC are available on the SEC’s website at
http://www.sec.gov.
This list of factors that may affect actual results and the
accuracy of forward-looking statements is illustrative and is not
intended to be exhaustive. These risks and uncertainties may cause
actual future results to be materially different than those
expressed in such forward-looking statements. Frontier does not
intend, nor does it undertake any duty, to update any
forward-looking statements.
Participants in the
Solicitation
Frontier and Frontier’s 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 the
stockholders of Frontier in connection with the proposed
transactions. Information about Frontier’s directors and executive
officers is set forth in the Frontier Proxy Statement on Schedule
14A for its 2024 Annual Meeting of Stockholders, which was filed
with the SEC on April 3, 2024. To the extent holdings of Frontier’s
securities by its directors or executives officers have changed
since the amounts set forth in such 2024 proxy statement, such
changes have been or will be reflected on Initial Statements of
Beneficial Ownership on Form 3 or Statements of Change in Ownership
on Form 4 filed with the SEC, including the Form 4s filed by: John
Harrobin on May 7, 2024; William McGloin on May 7, 2024 and June
21, 2024; Scott C. Beasley on May 7, 2024; Mark D. Nielsen on May
7, 2024; John G. Stratton on May 7, 2024; Veronica Bloodworth on
May 7, 2024; Alan Gardner on May 7, 2024; Maryann Turcke on May 30,
2024; Kevin L. Beebe on May 30, 2024; George Haywood Young III on
May 30, 2024; Pamela L. Coe on May 30, 2024; Lisa Chang on May 30,
2024; Stephen Charles Pusey on May 30, 2024; Pratabkumar Vemana on
May 30, 2024; and Margaret Mary Smyth on May 30, 2024. Additional
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, is included in Frontier’s definitive proxy statement
relating to the proposed transactions, which was filed with the SEC
on October 7, 2024. These documents (when available) may be
obtained free of charge from the SEC’s website at www.sec.gov or
Frontier’s website at investor.frontier.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241025912324/en/
Investor Contact Spencer Kurn SVP, Investor Relations +1
401-225-0475 spencer.kurn@ftr.com
Media Contact Chrissy Murray VP, Corporate Communications
+1 504-952-4225 chrissy.murray@ftr.com
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