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Hawaiian Telcom deal advances as shareholders OK sale to Cincinnati Bell

Updated: 
November 7, 2017 - 12:05am

HONOLULU — Hawaiian Telcom’s $650 million cash-and-stock sale to Cincinnati Bell took another step toward completion Tuesday morning after the Honolulu company’s shareholders overwhelmingly approved the deal.

About 99.8 percent of the shares voted were in favor of the sale, representing 86.2 percent of Hawaiian Telcom’s outstanding shares as of the record date of Sept. 26. The two companies have said they expect the deal, which was initially announced on July 10, to close in the second half of 2018.

The transaction still requires regulatory approvals from the Federal Communications Commission, the Hawaii Public Utilities Commission and the state Department of Commerce and Consumer Affairs. The deal recently cleared the Hart-Scott-Rodino Act review period with the Federal Trade Commission and the Department of Justice.

“Today’s vote demonstrates strong support from our stockholders for the merger with Cincinnati Bell,” Hawaiian Telcom President and CEO Scott Barber said in a statement. “In addition to delivering immediate value, this transaction provides our stockholders the opportunity to participate in the potential upside of the combined company, with added scale and efficiency, expanded product offerings, and increased investment and success in fiber. We believe this strategic combination will drive long-term value for both companies’ stockholders, customers, employees, and our communities.”

Hawaiian Telcom will continue to operate under the same name and will maintain its local management and branding.

Under terms of the agreement, Hawaiian Telcom stockholders will have the option to elect either $30.75 in cash, 1.6305 shares of Cincinnati Bell common stock, or a mix of $18.45 in cash and 0.6522 shares of Cincinnati Bell common stock for each share of Hawaiian Telcom. The total amount is subject to proration so that what is paid to Hawaiian Telcom stockholders will be 60 percent cash and 40 percent Cincinnati Bell common stock. The payout represents a 26 percent premium to Hawaiian Telcom’s closing price of $24.44 on July 7, which was the final trading day before the deal was announced. Upon completion of the deal, Hawaiian Telcom shareholders will own about 15 percent of the combined company and Cincinnati Bell shareholders approximately 85 percent.

Hawaiian Telcom’s stock closed down 2 cents Tuesday at $30.28. Cincinnati Bell’s shares rose 40 cents to $19.80. The shareholder vote was announced after the stock market closed.

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