British Columbia Investment Management Corporation (BCI), one of the largest institutional investors in Canada, is teaming up with Searchlight Capital Partners LP to take Consolidated Communications Holdings Inc. (Nasdaq:CNSL) private in a US$3.1-billion transaction.
Searchlight already owns approximately 34 per cent of Consolidated Communications' shares so the transaction is to buy the remaining 66 per cent of the company's shares for US$4.70 each in cash.
Consolidated Communications' share price was up by more than 16 per cent in early afternoon trading Vancouver time, to US$4.10, which is far below the price for which the BCI partnership intends to buy the shares.
The press release announcing the transaction describes the deal as a "definitive agreement," as well as a "proposed transaction" that is anticipated to close by the first quarter of 2025.
It notes that the deal "has been unanimously approved by a special committee of independent and disinterested directors of the board."
Independent legal and financial advisors have advised that committee, which was formed to evaluate and consider the proposal as well as other potential strategic alternatives, according to the release.
"The board of directors of the company, following recusals of directors affiliated with Searchlight and [BCI,] has approved the proposed transaction on the unanimous recommendation of the special committee," it says.
"This transaction reflects the value of our business, taking into account both the growth opportunities of the company’s fiber build-out, as well as the potential risks associated with the company’s ongoing strategic transformation, including impacts from liquidity and leverage limitations within which the company must operate, the dynamic competitive pressures of a sector-wide fiber conversion and the imperative to continue our fiber build-out," Consolidated Communications' chairman Robert Curry said in the release.
Searchlight has approximately US$11 billion in assets under management while BCI has approximately $233 billion worth of gross assets in Canadian dollars.
