What
has been announced?
Citizens
Communications Company has reached an agreement to acquire Commonwealth
Telephone Enterprises Inc. for $1.16 billion. This is a great incremental
acquisition for us, which provides us with a logical extension to our existing
presence in Pennsylvania.
What
is Commonwealth Telephone Enterprises?
Commonwealth
is the eleventh largest local exchange carrier in the U.S. and a leading
provider of telecommunications services to rural markets in Pennsylvania.
All of
its operations are in Pennsylvania and have no geographical overlap with
our
existing operations, so it’s a great opportunity to expand our
business.
Why
are we making this acquisition?
Commonwealth
is an attractive extension acquisition for us, and an excellent fit from
a
strategic, financial and operational standpoint. This transaction is consistent
with our stated strategy of being the leader in providing communications
services to the markets we serve.
The
acquisition of Commonwealth enhances our strategic position by maintaining
our
focus on rural markets, while providing us with greater scale and scope in
PA.
It provides product expansion and revenue growth opportunities, in addition
to
the leveraging of our existing operations and corporate infrastructure in
Pennsylvania. Upon completion of the acquisition, we will have approximately
2.6
million access lines, 388,000 High-Speed Internet subscribers and 6,600
employees.
Will
I lose my job?
We
are
not anticipating any job losses at Citizens as a direct result of this
acquisition. Synergies from this transaction will come primarily from the
elimination of the Commonwealth corporate overhead.
Will
this acquisition impact my pension or benefits?
No.
It
will have no impact on your pension or benefits.
What
changes will our customers see?
This
transaction will not be completed for 6-9 months and until then, our two
companies will continue to operate independently, so our customers won’t see any
changes in the near-term. Once the acquisition is finalized, we will be able
to
offer Commonwealth’s customers our full array of products and services, many of
which they do not have access to now.
What
will be happening to Commonwealth’s employees?
There
will be no impact on Commonwealth employees in the near-term as this transaction
is not expected to be complete for 6-9 months. It is important to remember
that
we have no overlapping operations with Commonwealth, so the bulk of Commonwealth
employees will not be impacted at all by this transaction. Over the next
several
months, as we plan the integration of our two companies, we will be reviewing
areas where there are duplicate or overlapping functions.
How
will Commonwealth fit into Citizens and how will it be
managed?
Jake
Casey, Executive Vice President, who has led integration teams for us in
the
past, will lead this integration process. I am also delighted to announce
that
the combined business will be run on a day-to-day basis by Ken Arndt, currently
Vice President, Sales and Marketing for the East Region, who will become
the
VP/State GM of Pennsylvania upon completion of the transaction. Commonwealth
will become part of the Central Region and Ken Arndt will report to John
Lass
Senior Vice President and General Manager of the Central Region. Ken formerly
worked at Commonwealth and brings a strong knowledge of its markets and its
customers to the table. Ken’s replacement in the East Region will be announced
in the near future.
When
will this transaction close?
The
transaction is subject to approval by Commonwealth’s shareholders, as well as
the satisfaction of certain customary conditions, including necessary approvals
from federal and state regulatory authorities. We expect this will take
6-9
months. We will keep you updated as we approach the closing
date.
Who
can I talk to if I have more questions?
If
you
have any questions or concerns, please do not hesitate to ask your supervisor
or
a member of our human resources team, or e-mail your query to frontier@frontiercorp.com
and we
will try to respond within 24 hours.
FORWARD
LOOKING STATEMENTS
This
material contains forward-looking statements that are made pursuant to
the safe
harbor provisions of The Private Securities Litigation Reform Act of 1995.
These
statements are made on the basis of management’s views and assumptions regarding
future events and business performance. Words such as “believe”, “anticipate”,
“expect”, and similar expressions are intended to identify forward-looking
statements. Forward-looking statements (including oral representations)
involve
risks and uncertainties that may cause actual results to differ materially
from
any future results, performance or achievements expressed or implied by
such
statements. These risks and uncertainties are based on a number of factors,
including, but not limited, to: our ability to complete the acquisition
of
Commonwealth, to successfully integrate their operations and to realize
the
synergies from the acquisition; changes in the number of our revenue generating
units; greater than anticipated competition from wireless or wireline carriers;
general and local economic and employment conditions; our ability to effectively
manage our operations, costs and capital spending; our ability to successfully
introduce new product offerings including bundled service packages; our
ability
to sell enhanced services; changes in accounting policies or practices;
changes
in regulation in the communications industry; our ability to manage our
operating expenses, capital expenditures, pay dividends and reduce or refinance
our debt; adverse changes in the ratings of our debt securities; bankruptcies
in
the telecommunications industry; the effects of technological changes and
competition on our capital expenditures and product and service offerings;
increased medical, retiree and pension expenses; changes in income tax
rates and
tax laws; our ability to successfully renegotiate expiring union contracts;
and
general factors, including changes in economic, business and industry
conditions. These and other uncertainties related to our business are described
in greater detail in our filings with the Securities and Exchange Commission,
including our reports on Form 10-K and 10-Q. We undertake no obligation
to
publicly update or revise any forward-looking statement or to make any
other
forward-looking statements, whether as a result of new information, future
events or otherwise unless required to do so by securities laws.
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
This
material is not a substitute for the prospectus/proxy statement Citizens
Communications Company and Commonwealth Telephone Enterprises, Inc. will
file
with the Securities and Exchange Commission. Investors are urged to read
the
prospectus/proxy statement which will contain important information, including
detailed risk factors, when it becomes available. The prospectus/proxy
statement
and other documents which will be filed by Citizens Communications Company
and
Commonwealth Telephone Enterprises, Inc. with the Securities and Exchange
Commission will be available free of charge at the SEC’s website, www.sec.gov,
or by directing a request when such a filing is made to Citizens Communications
Company, 3 High Ridge Park, Stamford, CT 06905, Attention: Investor Relations;
or to Commonwealth Telephone Enterprises, Inc., 100 CTE Drive, Dallas,
Pennsylvania 18612, Attention: Investor Relations. The final prospectus/proxy
statement will be mailed to shareholders of Commonwealth Telephone Enterprises,
Inc.
This
communication shall not constitute an offer to sell or the solicitation
of an
offer to buy securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior
to registration or qualification under the securities laws of such
jurisdiction.
Citizens
Communications Company and Commonwealth Telephone Enterprises, Inc., and
certain
of their respective directors, executive officers and other members of
management and employees are participants in the solicitation of proxies
in
connection with the proposed transactions. Information about the directors
and
executive officers of Citizens Communications Company is set forth in the
proxy
statement for Citizens Communications Company’s 2006 annual meeting of
shareholders. Information about the directors and executive officers of
Commonwealth Telephone Enterprises, Inc. is set forth in the proxy statement
for
Commonwealth Telephone Enterprises, Inc.’s 2006 annual meeting of shareholders.
Investors may obtain additional information regarding the interests of
such
participants in the proposed transactions by reading the prospectus/proxy
statement for such proposed transactions when it becomes available.