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Closing date set in Verizon, FairPoint deal
By Lisa Kerner
Charlotte, N.C., Feb. 26 - Verizon Communications Inc. expects to complete the proposed spinoff of its subsidiary, Northern New England Spinco Inc., to Verizon stockholders on March 31, assuming that all merger conditions are met.
Spinco will then immediately merge with FairPoint Communications, Inc., with Spinco shares being converted into shares of FairPoint common stock, according to a company news release.
Verizon stockholders will receive one share of FairPoint common stock for approximately every 53.2203 shares of Verizon common stock that they own as of the March 7 record date, or some 0.0188 shares of FairPoint common stock for each share of Verizon common stock.
FairPoint will pay cash in lieu of any fractional shares of FairPoint common stock.
The exact distribution ratio has yet to be determined.
FairPoint will issue about 53.8 million of its common shares to be distributed in a tax-free Reverse Morris Trust transaction to the shareholders of Verizon as well as assume roughly $1.7 billion of debt. The transaction will give FairPoint's shareholders 40% ownership and Verizon's shareholders 60% ownership of the combined company.
From March 5 through the merger's close, there will be two markets in Verizon common stock on the New York Stock Exchange: a "regular way" market and an "ex-distribution" market.
FairPoint said it has received the last required regulatory approval from the New Hampshire Public Utilities Commission, clearing the way for the merger to close.
As previously reported, under the terms of their Jan. 16, 2007 agreement, FairPoint will acquire Verizon's wireline operations in Vermont, Maine and New Hampshire.
Verizon, based in New York, delivers broadband and other wireline and wireless communication solutions.
Charlotte, N.C.-based FairPoint is a provider of communications services to rural communities.
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