 SteveConIBEW 2222 Boston, MAPremium
join:2004-09-02
Boston, MA | reply to Sammer
Re: vz said by Sammer:Verizon is just selling their landlines in the three states of ME, NH, and VT. IOW they are splitting up what used to be NYNEX and keeping MA, NY, and RI. Actually Fairpoint will become a majority owned subsidiary of Verizon. You're right about ME, NH & VT access lines being sold - but dead wrong about Fairpoint becoming any kind subsidiary of Verizon.
Step 1: Verizon will create a “spin off” company of Verizon operations, which will be a wholly owned subsidiary of the core company. The VT, ME, and NH operations will transfer $900 million to the Verizon parent corporation.
Step 2. Verizon will take the new “spin off” Company and immediately merge it with and into FairPoint. Verizon will receive $2,100 per access line. Total valuation of the deal $2.715 billion ($1.015 billion FairPoint stock to VZ shareholders, and $1.7 billion in Verizon debt transferred to FairPoint)
Step 3. FairPoint will take control of Verizon Plant, central offices, switches, customer lists, all internet systems from customer to (but not including) internet point of presence, internet customer lists, FIOS build out around Nashua NH.
In step 1, Verizon corporation receives $900M from the new entity that they created.
Look at step 2 closely. Verizon's stockholders get $1.015B in Fairpoint stock. Verizon corporation gets $1.7B of its debt transfered to Fairpoint.
Verizon ends up with ZERO Fairpoint stock - hence ZERO control of Fairpoint. Verizon stockholders get Fairpoint stock to keep or sell.
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United we bargain, divided we beg. |
Sammer
join:2005-12-22
Canonsburg, PA | Technically that's true it's Verizon's stockholders who will own 60% of Fairpoint so it's a spinoff rather than a subsidiary. However Verizon will get to choose 6 of the 9 members of the board of directors. Fairpoint will have to remain independent for one year or it will owe the $600 million tax savings that Verizon is getting. |
