Cincinnati Bell Announces $2.6B Sale to Brookfield Infrastructure
Cincinnati Bell agreed to sell its telecom company, with a network footprint of more than 1.3 million homes in Ohio, Kentucky, Indiana and Hawaii, to Toronto-based Brookfield Infrastructure in a deal announced Monday valued at $2.6 billion, including stock purchase and the assumption of the telco's debt. "The transaction strengthens our financial position, enabling accelerated investment in our strategic products that is not presently available to Cincinnati Bell as a standalone company," said Leigh Fox, president-CEO of Cincinnati Bell, in a statement. "This will allow us to drive growth and maximize value over the long term," he said. Brookfield Infrastructure CEO Sam Pollock said the company will leverage its operating expertise to help Cincinnati Bell management "complete its industry-leading fiber optic roll-out plan."
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Share prices for Cincinnati Bell (CBB) were up 35.36 percent over Friday's closing to $10.45 by Monday's market close. Under the agreement with Brookfield, CBB shareholders would receive $10.50 per share of CBB's common stock.
The deal is expected to close by the end of 2020, subject to regulatory and shareholder approval. Cincinnati Bell's board already voted its approval. The public company would be taken private if the deal closes, said Moody's analysts in a note Monday.
The deal wasn't a surprise to telecom analyst Jeff Kagan. "Cincinnati Bell has been trying to keep up with the massive changes occurring in the industry," he told us. "That requires a lot of investment and a lot of talent." He said it's possible the deal will help Cincinnati Bell speed up its customer offerings, but it's too soon to tell. Kagan predicts local telecom markets will become even more competitive with the move to 5G wireless, as providers offer wireless video and broadband services to compete directly with cable and telephone companies.