Frontier Communications (NASDAQ: FYBR) has strongly recommended that shareholders support Verizon’s (NYSE: VZ) $20 billion acquisition offer, emphasizing that after reviewing other potential bids, Verizon’s proposal offers the most advantageous route forward, according to Reuters. Frontier claims Verizon’s offer surpasses any alternative – including Frontier’s own growth plans – as the most favorable choice for maximizing shareholder value.
While Frontier didn’t identify the other interested parties, this endorsement suggests confidence that Verizon’s offer provides a premium that reflects the full potential of Frontier’s assets in the fiber-optic sector. With a shareholder vote ahead, this endorsement aims to reinforce support for the merger.
Verizon’s proposed acquisition of Frontier reflects a strategic move to boost its fiber optic network and customer base, enhancing its competitive edge against giants like AT&T (NYSE: T). Verizon’s $38.50-per-share offer represents a premium over Frontier’s recent stock prices, but some Frontier shareholders argue that the valuation may undervalue the company’s potential, as reported by Reuters. Verizon CEO Hans Vestberg recently reaffirmed the offer as “best and final,” emphasizing confidence in the bid’s value for stakeholders.
Frontier responded, highlighting the offer’s attractiveness and noting it represents a significant premium relative to its past performance. However, if Frontier rejects the deal, it could owe Verizon a $320 million termination fee. Conversely, if Verizon withdraws, it may be liable for $590 million to Frontier, Reuters reported.
These terms underscore the high stakes of the transaction, with both sides seeking assurances to mitigate financial risks.
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