CenturyTel acquires Embarq

Jul 02, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- CTL | Quote | Chart | News | PowerRating -- CenturyTel, Inc., a provider of communications services, has acquired all of the outstanding common stock in Embarq Corporation. Both the companies are based in the US.

Embarq is a provider of internet, wireless phone, data, and entertainment services.

Update on June 25, 2009:

CenturyTel has received clearance from the Federal Communications Commission to acquire all of the outstanding common stock in Embarq.

The transaction has received all necessary approvals and is expected on close on July 1, 2009.

Update on May 29, 2009:

CenturyTel has received clearance from the Pennsylvania Public Utility Commission and the Washington Utilities and Transportation Commission to acquire all of the outstanding common stock in Embarq.

The transaction has received all necessary approvals from the states in which CenturyTel and Embarq provide local service. The only remaining regulatory approval required to complete the transaction is that of the Federal Communications Commission.

Update on May 19, 2009:

CenturyTel has received clearance from the California Public Utilities Commission, the Oregon Public Utility Commission, and the Virginia State Corporation Commission to acquire all of the outstanding common stock in Embarq.

Update on April 29, 2009:

CenturyTel has received clearance from the Public Utilities Commission of Nevada and the Tennessee Regulatory Authority to acquire all of the outstanding common stock in Embarq.

Update on March 31, 2009:

CenturyTel has received clearance from the Florida and Louisiana Public Service Commissions and the Illinois Commerce Commission to acquire all of the outstanding common stock in Embarq.

Update on March 3, 2009:

CenturyTel has received clearance from the Georgia, Mississippi, and Nebraska Public Service Commissions and the Minnesota and Ohio Public Utilities Commissions, to acquire all of the outstanding common stock in Embarq.

Update on January 27, 2009:

The acquisition of Embarq by CenturyTel has been approved by shareholders of both the companies.

Announcement (October 27, 2008):

CenturyTel has signed a definitive agreement to acquire all of the outstanding common stock in Embarq in all stock transaction. The transaction is valued at approximately $11,600 million, including the assumption of Embarq's $5,800 million debt.

Under the terms of the transaction, Embarq shareholders would receive 1.37 shares of CenturyTel stock for every Embarq share, which represents approximately $40.42 per Embarq share as on October 24, 2008. The offer price represents a 36% premium to the closing price of Embarq shares on October 24, 2008.

Upon completion, Embarq shareholders would own approximately 66% and CenturyTel shareholders would own about 34% of the combined company.

Barclays Capital plc, Morgan Stanley & Co. International plc, Banc of America Securities LLC, Merrill Lynch & Co., Inc., and Wachovia Capital Markets, LLC are acting as financial advisors to CenturyTel. Wachtell, Lipton, Rosen & Katz LLP, Jones Walker Waechter Poitevent Carrere & Denegre L.L.P., and Weil, Gotshal & Manges LLP are acting as legal advisors to CenturyTel.

JP Morgan Partners, LLC is acting as financial advisor, while Cravath, Swaine & Moore LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as legal advisors to Embarq. Brunswick Group LLP is acting as PR advisor to Embarq.

Deal Value (US$ Million) 11600
Deal Type                Acquisition
Sub-Category             100% Acquisition
Deal Status              Completed: 2009-07-01

Deal Participants

Target (Company)   Embarq Corporation (formerly LTD Holding Co.)
Acquirer (Company) CenturyTel, Inc.

Deal Rationale

The transaction would diversify revenues of CenturyTel and provide it with the expanded networks, expertise, and financial resources. The combined company is expected to be even more competitive, with significantly increased scale to facilitate economically attractive deployment of growth products and services including expanded IPTV, broadband, and wireless data offers. The transaction is expected to generate synergies of approximately $400 million annually within the first three years of operation. Key drivers of these synergies include reduction of corporate overhead, elimination of duplicate functions, enhanced revenue opportunities, and increased operational efficiencies.

Bid Premium ($ per share) 36

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