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Windstream Holdings Inc.
announced today the company's board of directors has given final
approval, subject to certain terms and conditions, for the tax-free spinoff of
select telecommunications network assets into Communications Sales & Leasing,
Inc. (CS&L), which will become an independent publicly traded real estate
investment trust (REIT). In addition, the company's board of directors
declared a prorated cash dividend subject to the closing of the spinoff.
"The board's final approval of this innovative strategic transaction
significantly advances our commitment to deliver value for shareholders," said
Tony Thomas, president and chief executive officer of Windstream. "Windstream
will be a stronger company with less debt and increased capacity to invest in
our network to provide advanced communication services to customers. CS&L will
provide an attractive yield to shareholders with the ability to grow and
diversify."
Windstream expects to distribute approximately 80.1 percent of CS&L shares on
April 24, 2015, to Windstream shareholders of record as of 5 p.m. EDT on April
10, 2015. The distribution is conditioned upon satisfaction of certain
customary closing conditions, including financing of the transaction.
Windstream intends to use the approximately 19.9 percent retained CS&L shares
opportunistically, subject to market conditions, during a 12-month period
following the spinoff to reduce debt.
In addition, conditioned on the closing of the spinoff, Windstream will make a
cash distribution equivalent to a prorated $.25 quarterly dividend to
Windstream shareholders of record as of 5 p.m. EDT on April 10, 2015. Assuming
the spinoff closes on April 24, 2015, the cash dividend would be $.0659, and
the company would expect to make the payment on April 24, 2015.
Following the spinoff, Windstream will continue to be listed on Nasdaq under
the symbol "WIN," while CS&L expects to list its common stock on Nasdaq under
the symbol "CSAL." Nasdaq has approved the listing of CS&L's common stock,
subject to official notice of issuance.
It is expected that between the record date of April 10, 2015, up to the
distribution date, the Windstream stock will trade with "due bills" allowing
the Windstream common stock to trade with an entitlement to receive shares of
CS&L common stock and the prorated cash dividend on the distribution date. Any
holder of Windstream stock who sells shares of Windstream on or before the
distribution date may be selling the entitlement to receive shares of the CS&L
common stock in the spinoff and the prorated cash dividend. Holders of
Windstream common stock are encouraged to consult with their financial
advisers regarding the specific implications of selling Windstream common
stock on or before the distribution date.
CS&L Shareholder Distribution & Dividend Practice
Upon close of the transaction, Windstream shareholders will retain their
Windstream shares and receive one share of CS&L for every five shares of
Windstream held. The spinoff is expected to be a tax-free distribution to
Windstream shareholders and requires no action by shareholders. Windstream
shareholders will receive cash in lieu of fractional shares for amounts of
less than one CS&L share. CS&L expects to pay an annual dividend of $2.40 per
share.
Windstream Reverse Stock Split & Dividend Practice
Immediately following the distribution of CS&L shares, Windstream will effect
a 1-for-6 reverse stock split. Windstream expects to pay an annual dividend of
$.60 per share after giving effect to the stock split.
Windstream Financial Outlook for 2015
Windstream also today affirmed its financial guidance for 2015 as provided on
Feb. 24, 2015.
Information Statement
CS&L's Form 10 registration statement in connection with the spinoff has been
declared effective by the U.S. Securities and Exchange Commission (SEC).
Windstream will promptly begin mailing to its shareholders the information
statement that appears as an exhibit to the registration statement. The
information statement will provide Windstream shareholders with more
information on the spinoff and the details of the transaction. No action is
required by Windstream shareholders to receive their CS&L shares.
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