Verizon (VZ) this morning said it has completed the spin-off and sale of New Communications Holdings, a collection of local phone businesses in 14 states. The business was merged into Frontier Communications (FTR); the result is that Verizon holders will end up with a 68% stake in Frontier. Verizon holders will receive on share of Frontier for every 4.165977 Verizon shares held as of June 7. (That’s 0.24 shares of FTR for each share of VZ.) Holders will receive cash in lieu of fractional shares.
Total value of the deal to Verizon is about $8.6 billion. Holders get $5.247 billion in Frontier common, and Verizon gets $3.333 billion in “value,” mostly $3.083 billion in cash. The company also reduced its debt position by $250 million for borrowings tied to the units being sold to Frontier.
VZ holders will receive their FTR shares on July 8.
VZ today is up 26 cents, or 1%, to $26.61; FTR is down 27 cents, or 3.5%, to $7.38.
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