DOW JONES NEWSWIRES
Windstream Corp. (WIN) will buy Pennsylvania-based D&E
Communications Inc. (DECC) for about $159 million in cash and
stock, a deal that will nearly double the telecommunications
company's presence in the state.
The move comes amid continued consolidation in the telecom
sector, as bigger players snap up smaller ones to boost their
operations. Wireline phone companies like Windstream and D&E
have been expanding into digital video and high-speed Internet
services as demand for landline phones continues to decline amid
the weak housing market and the popularity of cell phones.
D&E shareholders will receive 0.65 shares of Windstream
stock and $5 in cash for each D&E share under the deal. That
values D&E at about $10.88 a share, a 61% premium to its
closing price of $6.75 Friday.
Windstream said it will issue about 9.5 million shares valued at
$86 million based on Friday's closing price and pay about $73
million in cash. Windstream said it will also assume about $171
million of debt. It will finance the deal with existing cash and
the current capacity of its revolving credit agreement.
Windstream's shares were recently down 2.7% at $8.81 in
premarket trading. D&E's were unchanged from Friday's
close.
Windstream will add about 165,000 access lines and about 44,000
high-speed Internet customers through the transaction. The company
already has about 200,000 access lines in the state, and nearly 3
million in the 16 states it operates in. Windstream will also get
six wireless licenses in central Pennsylvania.
The deal is expected to close in the second half of the
year.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com