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Cincinnati Bell, Brookfield Infrastructure $2.75bn merger in the hands of shareholders

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Cincinnati Bell Inc. (NYSE:CBB) has announced that it has amended its definitive merger agreement with Brookfield Infrastructure and its institutional partners, to increase the consideration payable to holders of outstanding shares of Cincinnati Bell common stock.

This will result in an increase per share cash transaction to US$12.50 from $10.50 per share in cash, which values the transaction at approximately $2.745 billion, including debt. 

The revised transaction price represents a 62% premium to the closing per share price of $7.72 on 20th December 2019, the last trading day prior to the date when the merger agreement was entered into.

According to Cincinnati Bell, the two companies negotiated the amendment following the receipt by Cincinnati Bell on the 27th February 2020 of a binding proposal to acquire all outstanding shares of Cincinnati Bell common stock for $12.50 from the infrastructure fund that previously submitted a non-binding proposal on 22nd January 2020. 

Cincinnati Bell said in a statement that its “Board of Directors approved the amended merger agreement and recommends that Cincinnati Bell's shareholders vote in favour of adopting the amended Brookfield merger agreement”.

Lynn A. Wentworth, chairman of the Cincinnati Bell Board of Directors, said: "After receiving a binding proposal reflecting a higher purchase price for Cincinnati Bell, Cincinnati Bell advised Brookfield of the proposal, which led to Brookfield increasing the price of our transaction with them. Following these discussions, our Board approved the amendment to the merger agreement. We believe the amended merger agreement is a result of a well-run sales process that allows our shareholders to realise higher value for their shares."

Cincinnati Bell will file a current report on Form 8-K with the US Securities and Exchange Commission containing a summary of the terms and conditions of the amendment to the definitive merger agreement. 

In the amendment, in consideration for the increased purchase price, the break-up fee payable by Cincinnati Bell in certain circumstances has increased from $17.97 million to $21.39 million.  All other terms of the Brookfield merger agreement remain the same.

The transaction is subject to certain customary closing conditions, including the approval by Cincinnati Bell's shareholders, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain regulatory approvals, and is expected to close by the end of 2020.

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