:max_bytes(150000):strip_icc()/GettyImages-1551169132-496c885390284e8da223693cad1953f4.jpg "Frontier Stock Tumbles as Verizon Announces $20B All-Cash Acquisition")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1551169132-496c885390284e8da223693cad1953f4.jpg)
KEY TAKEAWAYS
- Shares of Frontier Communications are tumbling 10% in premarket trading after Verizon Communications said it plans to buy the fiber network company.
- The transaction is valued at about $20 billion of enterprise value.
- Verizon is offering Frontier shareholders $38.50 a share in cash, a 44% premium to Frontier’s 90-day volume-weighted average share price on Tuesday, the day before The Wall Street Journal reported that a deal was close.
Shares of Frontier Communications (FYBR) are tumbling 10% in premarket trading after Verizon Communications (VZ) said it plans to buy the fiber network company for $20 billion in cash.
Verizon said the deal will expand its fiber network and is “expected to be accretive to revenue and adjusted EBITDA growth” once it closes.
“The acquisition of Frontier is a strategic fit,” Verizon Chairman and Chief Executive Officer (CEO) Hans Vestberg said. “It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States.”
Verizon Offers $38.50 Per Frontier Share
Verizon is offering Frontier shareholders $38.50 a share in cash, a 44% premium to Frontier’s 90-day volume-weighted average share price on Tuesday, the day before The Wall Street Journal reported that a deal was close.
The transaction has been unanimously approved by both boards and is expected to close in around 18 months, Verizon said, subject to the green light from Frontier’s shareholders and regulatory approvals.
Frontier shares jumped 38% to close Wednesday at $38.68, higher than the offer price.
Verizon shares are rising 1% about 90 minutes before the opening bell Thursday.