Consolidated Communications Files Investor Presentation Highlighting Benefits Of Proposed Transaction With Searchlight And BCI

Author: Benzinga Newsdesk | January 11, 2024 09:14am

Mails Letter to Shareholders Reiterating that Shareholders Should Vote "FOR" the Value Maximizing Transaction TODAY

Consolidated Communications Holdings, Inc. (NASDAQ:CNSL) (the "Company" or "Consolidated"), filed an investor presentation with the U.S. Securities and Exchange Commission ("SEC") on January 10, 2024 in connection with the Company's upcoming special meeting of shareholders (the "Special Meeting") on January 31, 2024. The presentation is available on the Company's investor relations website at https://ir.consolidated.com/.

The Company urges its shareholders to vote "FOR" the proposed acquisition of the Company by affiliates of Searchlight Capital Partners, L.P. ("Searchlight") and British Columbia Investment Management Corporation ("BCI") (the "Proposed Transaction"). Shareholders of record as of December 13, 2023, are entitled to vote at the Special Meeting.

Highlights of the presentation include:

• Transaction offers a compelling valuation, and shifts execution, liquidity, and market risk to buyers
  • All-cash offer at a 70% premium to Consolidated's unaffected1 share price is significantly higher than public and take-private precedent transactions, and exceeds analysts' price targets, despite material sector-wide decline.
  • Implied 9.6x LTM EBITDA multiple is higher than any Local Exchange Carrier precedent transaction in at least a decade.
  • Eliminates ongoing uncertainty of liquidity, funding and execution risks, transferring those risks to Searchlight and BCI.
  • Extensive special committee process over six months examined multiple strategic alternatives and achieved a 17.5% increase in price to the original offer.
• Standalone plan carries more downside risk than upside risk
  • Consolidated no longer has the liquidity to fund its prior standalone growth plans and sufficient external financing is not readily available.
  • Liquidity constraints add serious risk to the Company's capital-intensive fiber transformation, which is a requirement if the Company is to remain competitive and deliver growth.
  • Time to market is imperative – those who are first to market with fiber offerings will be best-positioned to take and hold significant share. Delays to Consolidated's fiber build due to liquidity constraints cedes its incumbency advantage, presenting potential franchise risk.
• Voting down this deal would be disastrous for shareholders
  • Wildcat Capital Management, LLC may dismiss the strategic urgency of our liquidity constraints but if this deal is not approved, the market will not be so forgiving. Peers of Consolidated have traded down, underscoring the market's concern about the challenges Consolidated and its peers face.
  • Wildcat's analysis fails to account for both the cost and dilutive impact of the additional capital needed to execute the standalone plan and the significant execution risks that fiber conversion presents.
  • Wildcat has an unrealistic demand for $14.00 per share – a 407% premium over the unaffected stock price.
  • No other bidders emerged during the well-publicized process or post-announcement of the Proposed Transaction, demonstrating that this is the best deal available.

Consolidated also mailed a letter to its shareholders in connection with the Special Meeting. The full text of the letter follows:

January 11, 2024

Dear Fellow Shareholders,

The special committee of independent directors (the "Special Committee") of the Board of Directors of Consolidated Communications Holdings, Inc. (the "Board") is here to answer your questions about the value-maximizing acquisition of the Company proposed by affiliates of Searchlight Capital Partners, L.P. ("Searchlight") and British Columbia Investment Management Corporation ("BCI") (the "Proposed Transaction").

The January 31, 2024 deadline to vote on the Proposed Transaction is fast approaching. You only have one opportunity to protect the value of your investment and realize the benefits.

Vote Your Shares "FOR" Today –

Not Voting Is the Same as Voting Against the Proposed Transaction

Why should I vote FOR the deal?	Casting your vote is the best way for you to secure this compelling cash premium.   Our standalone plan carries significant downside risk due to our constrained liquidity position and limited access to capital. We are simply unable to fund future fiber builds at the pace necessary to remain competitive and to continue to grow.   The Proposed Transaction eliminates the real risk that shareholders face if Consolidated were to remain public, and transfers all liquidity, financing and execution risks to Searchlight and BCI.
Is this my best option?	We believe so, yes.   The Special Committee completed an exhaustive evaluation of all opportunities to maximize value for shareholders, meeting more than 35 times over a six-month period. The process was public and highly visible from the moment Searchlight and BCI submitted their initial non-binding proposal to the Board. No parties expressed interest in bidding despite this long and public process.   The Special Committee's robust evaluation underscores that the Proposed Transaction is the most compelling path forward for Consolidated and its shareholders.   The $4.70 per share all-cash offer is: A 70% premium to our unaffected share price1 Significantly higher than certain recent public and take private precedent transactions Significantly higher than analysts' price targets prior to the unaffected date1
What happens if I don't vote?	If we do not get enough votes in favor to approve the transaction, it will fail and Consolidated's share price is at risk of dropping significantly below the pre-announcement price.   Maximize the value of your investment and vote "FOR" the Proposed Transaction today.   Your vote is extremely important, regardless of how many shares you own. Every vote counts and is critical to the future of the Company. Not voting is the same as voting against the transaction.
How do I vote?	Consolidated shareholders have three quick and easy ways to vote "FOR" the Proposed Transaction up until 11:59 p.m. ET the day before the cut-off date or meeting date:   Vote Online: Before the meeting, go to proxyvote.com or scan the QR code on your card. Have your proxy card in hand and follow the instructions. Vote By Mail: Mark, sign and date the proxy card and return it in the postage-paid envelope provided. Vote By Phone: Dial 1-800-690-6903 on any touch-tone telephone. Have your proxy card in hand and follow the instructions.   Don't delay. We recommend that you vote promptly, even if you plan to attend the special meeting of shareholders.

As a Consolidated shareholder, your choice is clear: vote for significant, compelling and certain value. Vote "FOR" the Proposed Transaction today.

We thank you for your continued support.

Sincerely,

The Special Committee of the Board of Directors of Consolidated Communications Holdings, Inc.

Posted In: CNSL