Frontier Stockholders Approve Acquisition by Verizon

Rhea-AI Summary

Frontier Communications Parent (NASDAQ: FYBR) announced that its stockholders have approved the acquisition by Verizon Communications (NYSE, NASDAQ: VZ). The vote saw approximately 63% of stockholders supporting the merger agreement, including ten of the company's top 12 stockholders. Under the agreement announced on September 5, 2024, Verizon will acquire Frontier in an all-cash transaction at $38.50 per share, representing a 37% premium to Frontier's unaffected share price on September 3, 2024. The transaction is expected to close by the first quarter of 2026, subject to regulatory approvals and customary closing conditions.

Positive

• All-cash transaction offering $38.50 per share, representing a 37% premium
• Strong stockholder support with 63% approval and backing from 10 of top 12 stockholders
• Strategic expansion of fiber network coverage through merger with Verizon

Negative

• Extended closing timeline until Q1 2026
• Transaction still subject to regulatory approvals

Insights

Financial Analyst

This merger approval marks a significant milestone in the telecom industry consolidation. The $38.50 per share cash offer, representing a 37% premium, values Frontier's fiber infrastructure and customer base substantially. The strong stockholder support, with 63% approval including major institutional investors, validates the deal's strategic and financial merits.

The acquisition strengthens Verizon's fiber footprint and competitive position in the fixed broadband market. For Frontier investors, the all-cash deal provides immediate value realization and eliminates exposure to execution risks in the highly competitive fiber rollout landscape. However, the lengthy regulatory review period until Q1 2026 closing introduces some uncertainty, particularly regarding antitrust scrutiny in overlapping markets.

Market Research Analyst

This acquisition represents a strategic shift in the U.S. telecommunications landscape. The deal capitalizes on Frontier's extensive fiber network buildout and aligns with industry trends toward consolidated operations and enhanced scale efficiency. The transaction timing coincides with increasing demand for high-speed fiber connectivity and positions Verizon to better compete against cable operators and other fiber providers.

The extended closing timeline suggests complex regulatory reviews ahead, particularly regarding market concentration and competition. The deal's structure provides certainty for Frontier shareholders while allowing Verizon to strengthen its enterprise value proposition and residential broadband capabilities.

DALLAS--(BUSINESS WIRE)-- Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier” or the “Company”) today announced that its stockholders approved the acquisition by Verizon Communications Inc. (NYSE, NASDAQ: VZ) (“Verizon”) at its special meeting held on November 13, 2024. Approximately 63% of stockholders voted “For” the merger agreement proposal, with ten of the company’s top 12 stockholders voting to approve the transaction.

On September 5, 2024, Frontier and Verizon announced they had entered into a merger agreement, pursuant to which Verizon would acquire Frontier in an all-cash transaction. Frontier stockholders will receive $38.50 per share in cash, representing a premium of 37% to Frontier’s unaffected share price on September 3, 2024. The transaction is expected to close by the first quarter of 2026, subject to receipt of certain regulatory approvals and other customary closing conditions.

“Today’s vote demonstrates the strong value of the fiber business we have built over the past four years and our ability to expand access to reliable connectivity for more Americans,” said Nick Jeffery, President and Chief Executive Officer, Frontier. “We look forward to closing this transaction by the first quarter of 2026 and beginning to deliver our premium fiber offering to millions more customers across our combined network.”

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.

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. The Company does not intend, nor does it undertake any duty, to update any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241113159549/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

Source: Frontier Communications Parent, Inc.

FAQ

What is the acquisition price per share for Frontier Communications (FYBR)?

Verizon will acquire Frontier Communications (FYBR) for $38.50 per share in cash, representing a 37% premium to Frontier's unaffected share price on September 3, 2024.

When is Verizon's acquisition of Frontier Communications (FYBR) expected to close?

The acquisition is expected to close by the first quarter of 2026, subject to regulatory approvals and other customary closing conditions.

What percentage of Frontier (FYBR) stockholders approved the Verizon acquisition?

Approximately 63% of Frontier stockholders voted in favor of the merger agreement, including ten of the company's top 12 stockholders.