Frontier Files Investor Presentation Detailing Significant Financial Benefits of Proposed Acquisition by Verizon

Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier”) today posted on its investor relations website and filed with the Securities and Exchange Commission an investor presentation detailing the significant value the proposed acquisition by Verizon Communications Inc. (NYSE, NASDAQ: VZ) (“Verizon”) creates for Frontier stockholders. The investor presentation is available on Frontier’s Investor Relations website.

Highlights from the presentation include:

  • Verizon’s best and final all-cash offer of $38.50 per share is highly attractive and creates significant value for stockholders, reflecting a 37% premium to Frontier’s pre-announcement price and a significant premium to all other measures of Frontier’s historical stock performance.
  • Frontier’s highly qualified Strategic Review Committee and Board of Directors led a robust and exhaustive process to evaluate its standalone plan and strategic options.
  • The Strategic Review Committee and Board unanimously and unequivocally believe the Verizon offer is in the best interests of stockholders and recommends stockholders vote “for” the transaction.

Superior Value for Frontier Stockholders

Verizon’s all-cash offer of $38.50 per share reflects a 66% premium to Frontier’s volume-weighted average share price over the past year, a 37% premium to its unaffected share price on September 3, 2024, and a 60% premium to when Frontier announced its strategic review process on February 5, 2024. The all-cash consideration provides certainty of value and immediate liquidity to Frontier stockholders at close. This price exceeded nearly all analyst price targets for Frontier prior to the deal, as well as the mid-points of the DCF valuations prepared in connection with the fairness opinions provided by PJT Partners and Barclays.

Comprehensive Board-Led Strategic Review Process

Frontier’s majority-independent Strategic Review Committee and Board of Directors thoroughly explored and evaluated multiple strategic alternatives including a sale, joint ventures, and remaining independent and executing towards Frontier’s standalone plan. The Board unanimously concluded that the transaction with Verizon is in the best interest of Frontier stockholders. The Strategic Review Committee and Board solicited interest from all logical potential parties, including four strategic and 13 financial parties. This deliberate and competitive process resulted in a 17% to 28% improvement in value from Verizon’s initial bid range and a significant premium to the only other bidder. This process resulted in an all-cash offer of $38.50, which represents a 54% improvement to the first indication of value received in November 2023. As a result of this robust process, the Board unanimously concluded that Verizon’s final offer of $38.50 per share presents superior value over all other potential paths, including Frontier’s ambitious standalone plan.

Transaction Addresses Sensitivities Inherent in Ambitious Standalone Plan

Over the last four years, Frontier has made remarkable progress in executing its ambitious strategy, expanding its fiber network and growing its fiber revenues. However, small changes in underlying value drivers can have a significant impact on the value of the company’s standalone plan. This proposed transaction with Verizon provides certainty against potential downside factors and sensitivities tied to Frontier’s ambitious standalone plan, including:

  • Negative cash flows through 2027 and high leverage; additional debt funding required to sustain Frontier’s fiber network build plan, which may not be available at attractive terms
  • Competition from cable and other broadband providers, including FTTH overbuilders, as well as increased competition from converged / bundled wireline and wireless offerings
  • Exposure to declining legacy services facing secular headwinds
  • Plan assumes status quo macroeconomic environment

Strategic Review Committee and Board Unanimously Believe that the Verizon Transaction is in the Best Interests of Stockholders

The Board has concluded through an exhaustive and competitive process that the Verizon transaction is in the best interests of Frontier stockholders. If the transaction is not approved, Frontier stockholders may face immediate loss of stockholder value with no assurance of equal or greater value in the future. Additionally, there are no assurances that Verizon or any other bidder will return with another offer.

The Board unanimously and unequivocally believes the Verizon transaction is in the best interests of stockholders and strongly recommends stockholders vote in favor of the transaction.

About Frontier

Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider in the U.S. Driven by our purpose, Building Gigabit America®, we deliver blazing-fast broadband connectivity that unlocks the potential of millions of consumers and businesses. For more information, visit www.frontier.com.