Thursday, March 4, 2010

RCN Accepts Investor Group Buyout Offer

RCN, a competitive broadband provider serving Washington, D.C., Philadelphia, Lehigh Valley (PA), New York City, Boston and Chicago, agreed to a $1.2 billion buyout offer from an investment fund managed by ABRY.

As part of this agreement, each share of RCN common stock issued and outstanding immediately prior to the effective time of the merger will be entitled to receive $15 in cash, representing a 43% premium over RCN's average closing share price during the past 30 trading days and a 22% premium over the closing share price on March 4, 2010. The transaction has fully committed financing, consisting of a combination of equity to be invested by ABRY and debt financing to be provided by SunTrust Robinson Humphrey, Inc., GE Capital, Societe Generale, and certain of their affiliates.

The transaction is expected to be completed in the second half of 2010, subject to receipt of stockholder approval, regulatory approvals, including the receipt of required consents and approvals of the FCC, as well as satisfaction of other customary closing conditions. The transaction is not subject to any financing condition.

  • For Q3 2009, RCN reported having approximately 430,000 residential/small-medium business, an increase of 2,000 compared to the third quarter of 2008 and flat compared to the second quarter of 2009.

    Total revenue generating units of approximately 903,000 decreased by 12,000 compared to the third quarter of 2008 and decreased by 8,000 compared to the second quarter of 2009, as continued growth in video and data RGU's was offset by a reduction in voice RGU's, consistent with trends for highly-penetrated landline voice providers. Third quarter 2009 bundle rate and digital video penetration rate remained stable at 67% and 91%, respectively.

See also