CONX Corp. Announces Tender Offer to Complete Business Combination

Rhea-AI Summary

CONX Corp. initiates a tender offer to purchase up to 2,120,269 shares of its Class A common stock at $10.585614 per share. The offer is tied to a transaction with EchoStar Real Estate Holding L.L.C. for property in Littleton, Colorado. The Company's Board of Directors has endorsed the offer, but no specific recommendation is made to stockholders.

Financial Analyst

The announcement by CONX Corp. of a tender offer to purchase its own shares is a strategic financial move that can have several implications for the company's stock performance and capital structure. The tender offer price is slightly below the recent closing price, which suggests a cautious approach by the company to not significantly overpay for its shares. This could be seen as a signal that the company believes its stock is fairly valued or potentially undervalued, prompting them to repurchase shares as an investment.

From a financial perspective, share repurchases can be positive for remaining shareholders as it may lead to an increase in earnings per share (EPS), assuming the reduction in share count offsets the cash outlay. However, it's important to note that the funding of the tender offer will come from the company's trust account, which may have been allocated for other strategic purposes. The opportunity cost of this capital deployment should be considered, especially if it could have been used for growth initiatives or debt reduction.

Furthermore, the waiver of redemption rights by the company's sponsor, officers and directors could be interpreted as a vote of confidence in the company's future prospects. This alignment of interests with public shareholders might be viewed favorably by the market. However, investors should be cautious and evaluate the underlying reasons for the tender offer, including the potential impact on the company's liquidity and future growth potential.

Market Research Analyst

The tender offer by CONX Corp. is a noteworthy event for market observers as it may influence investor sentiment and market dynamics for the company's stock. The timing of the tender offer, in relation to the sale and leaseback transaction with EchoStar Real Estate Holding L.L.C., suggests a strategic reallocation of capital within the company's balance sheet. This type of transaction is often undertaken to unlock the value of real estate assets and improve liquidity.

Market participants should monitor the uptake of the tender offer, as a high level of participation could indicate that investors are eager to liquidate at the offered price, perhaps reflecting a lack of confidence in the company's short-term growth prospects. Conversely, low participation might signal that investors expect future appreciation in the stock's value and prefer to retain their shares. Additionally, the outcome of the tender offer could affect the stock's liquidity and volatility post-transaction.

It is also essential to consider the broader market conditions and sector performance when evaluating the potential success and impact of such a tender offer. Market trends and investor appetite for risk in the sector that CONX Corp. operates in could significantly influence the response to the tender offer.

Legal Expert

In the context of CONX Corp.'s tender offer, several legal and regulatory considerations come into play. The tender offer process is governed by securities laws and regulations, which require detailed disclosure to ensure that shareholders have sufficient information to make an informed decision. The Offer to Purchase document and related filings with the SEC are important in this regard, providing the terms, conditions and legal implications of the tender offer.

Shareholders should be aware of their rights in the tender offer process, including the ability to withdraw tendered shares before the expiration date. The legal framework is designed to protect shareholders from coercive tactics and to ensure fair treatment. The waiver of redemption rights by the company's insiders is also significant from a legal standpoint, as it demonstrates compliance with fiduciary duties and mitigates potential conflicts of interest.

It is important for shareholders to review all legal documents associated with the tender offer carefully, including any potential risks outlined by the company. The legal language used in these documents can be complex and shareholders may benefit from seeking independent legal advice to fully understand the implications of participating or not participating in the tender offer.

LITTLETON, Colo., April 1, 2024 /PRNewswire/ -- CONX Corp. (Nasdaq: CONX) (the "Company" or "CONX") announced today that it has commenced a tender offer (the "Tender Offer") to purchase up to 2,120,269 of its shares of Class A common stock, par value $0.0001 per share (the "Class A Common Stock"), at a purchase price of $10.585614 per share (the "Purchase Price"). The Purchase Price, which is a fixed amount, was determined by calculating the quotient obtained by dividing: (i) the aggregate amount expected to be on deposit in the Company's trust account initially established to hold the proceeds of the initial public offering of CONX, as of two business days prior to the closing of the Transaction, including interest not previously released to CONX to pay its taxes (which will not include certain excise tax as set forth in the Offer to Purchase), by (ii) the total number of then outstanding shares of Class A Common Stock held by public stockholders, upon the terms and subject to certain conditions described in the Offer to Purchase and in the related letter of transmittal. The Class A Common Stock is currently listed on the Nasdaq Stock Exchange ("Nasdaq") under the symbol "CONX." On March 28, 2024, the closing price of the Class A Common Stock was $10.60 per share. The Tender Offer will expire at 5:00 p.m. New York City time on April 29, 2024 unless extended by the Company (the "Expiration Date").

Only shares of Class A Common Stock validly tendered, and not properly withdrawn, will be purchased by the Company pursuant to the Tender Offer. The Company's obligation to purchase shares of Class A Common Stock pursuant to the Tender Offer is subject to the satisfaction of certain conditions described in the Offer to Purchase (as defined below). Shares of Class A Common Stock tendered pursuant to the Tender Offer but not purchased by the Company in the Tender Offer will be returned at the Company's expense promptly following the expiration of the Tender Offer.

The Tender Offer is being made in connection with the Company's previously announced transaction (the "Transaction") with EchoStar Real Estate Holding L.L.C., a Colorado limited liability company ("Seller"), with respect to the sale and lease back of certain property in Littleton, Colorado, comprising the corporate headquarters of DISH Wireless (the "Property"). The Tender Offer is being made pursuant to that certain Purchase and Sale Agreement, dated March 10, 2024, between the Company and Seller. The Company intends to fund the purchase of Class A Common Stock shares in the Tender Offer with cash available to the Company from the Company's trust account. The Tender Offer is being made upon the terms and subject to the conditions set forth in the offer to purchase dated April 1, 2024 (the "Offer to Purchase"), the related letter of transmittal, and related documents filed with the U.S Security and Exchange Commission (the "SEC").

The Company's sponsor, officers and directors have agreed to waive their redemption rights with respect to any of their founder shares or public shares, if any, in connection with the consummation of the Transaction.

The Board of Directors of the Company, acting in accordance with the unanimous recommendation of a transaction committee of the Board, comprised solely of independent directors, has approved the Tender Offer. However, none of the Company, its Board of Directors, the Depositary or the Information Agent makes any recommendation to any stockholder whether to accept or refrain from accepting the Tender Offer with respect to your shares of Class A Common Stock. You are encouraged to review the Offer to Purchase contained in the Company's tender offer statement on Schedule TO, which has been filed with the SEC and which is being distributed to stockholders.

About CONX Corp.

CONX Corp. is a blank check company incorporated in Nevada on August 26, 2020, whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Subsequent to the completion of the Transaction, CONX anticipates to grow through acquisition opportunities, including, but not limited to, disruptive technologies and infrastructure assets to maximize its ability to drive shareholder value.

Important Legal Information 

The description contained herein is neither an offer to purchase nor a solicitation of an offer to sell securities of the Company. The Company has filed a tender offer statement on Schedule TO containing an offer to purchase, form of letter of transmittal and other documents relating to the Tender Offer (the "Disclosure Documents"). These documents contain important information about the Tender Offer that should be read carefully and considered before any decision is made with respect to the Tender Offer. These materials will be made available to the shareholders of the Company at no expense to them. In addition, such materials (and all other documents filed by the Company with SEC) are, and will be, available at no charge from the SEC through its website at www.sec.gov. Shareholders may also obtain free copies of the documents filed with the SEC by the Company by directing a request to Morrow Sodali LLC, as Information Agent for the Tender Offer, by telephone at: +1 (800) 662-5200 (toll-free, individuals), +1 (203) 658-9400 (banks and brokers) or by email at: CONX.info@investor.morrowsodali.com.

Forward-Looking Statements

This press release contains "forward-looking statements." Forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements are not historical facts but instead represent only the Company's belief regarding future results, many of which, by their nature are inherently uncertain and outside of the Company's control. Actual results may differ, possibly materially, from those anticipated in these forward looking statements. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

The risks and uncertainties include, but are not limited to:

• our ability to complete the Offer;
  
  
• our ability to complete the Transaction or to realize the anticipated benefits of the Transaction;
  
  
• the Transaction benefits do not meet the expectations of investors or securities analysts, and the impact on the market price of the Company's securities;
  
  
• our expectations around the Property and that certain commercial lease agreement to be entered into by and between the Company and Seller concurrently with the closing of the Transaction;
  
  
• changes in the financial and macroeconomic conditions and their impact on the Company and its business and financial performance after the Transaction;
  
  
• our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the Transaction;
  
  
• our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving the Transaction;
  
  
• our potential ability to obtain additional financing after the Transaction;
  
  
• our ability to maintain a listing for our securities on Nasdaq;
  
  
• our public securities' potential liquidity and trading, including following this Offer; and
  
  
• the lack of a market for our securities.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. You should carefully consider the risks and uncertainties that will be described in the Disclosure Documents and any amendments thereto, once available.

Information Agent 
Morrow Sodali LLC 
333 Ludlow Street 
5th Floor, South Tower 
Stamford, CT 06902 
Tel: +1 (800) 662-5200 (toll-free, individuals), +1 (203) 658-9400 (banks and brokers)
Email: CONX.info@investor.morrowsodali.com

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SOURCE CONX Corp.

FAQ

What is the purpose of CONX Corp.'s tender offer?

CONX Corp. has initiated a tender offer to purchase up to 2,120,269 shares of its Class A common stock at a fixed purchase price of $10.585614 per share.

Who is CONX Corp. transacting with in connection with the tender offer?

CONX Corp. is transacting with EchoStar Real Estate Holding L.L.C. for the sale and leaseback of certain property in Littleton, Colorado, which includes the corporate headquarters of DISH Wireless.

How is CONX Corp. funding the purchase of Class A Common Stock shares in the tender offer?

CONX Corp. intends to fund the purchase of Class A Common Stock shares in the tender offer with cash available from the Company's trust account.

What rights have CONX Corp.'s sponsor, officers, and directors agreed to waive?

CONX Corp.'s sponsor, officers, and directors have agreed to waive their redemption rights with respect to any of their founder shares or public shares in connection with the consummation of the transaction.

Who has approved the tender offer by CONX Corp.?

The Board of Directors of CONX Corp., following the unanimous recommendation of a transaction committee of the Board, comprised solely of independent directors, has approved the tender offer.