Mpower to be Acquired by TelePacific Communications for $1.92 a Share in Cash
ROCHESTER, NY - May 5, 2006 - Mpower Holding Corporation (AMEX: MPE), the parent
company of Mpower Communications Corp., a leading provider of data and voice
services to retail and wholesale business customers, today announced that it has
signed a definitive agreement to be acquired by TelePacific Communications, a
privately-held company which provides telecommunications services to businesses
throughout California and Las Vegas, Nevada.
Under the terms of the agreement, TelePacific will pay $1.92 in cash per Mpower
share, which equates to a total equity value of approximately $204 million on a
fully diluted basis. TelePacific will finance the acquisition through a fully
committed senior credit facility arranged by Credit Suisse and Bank of America.
Mpower Chairman and Chief Executive Officer Rolla P. Huff commented, "As
demonstrated by the terms of this transaction, Mpower has come to this agreement
with TelePacific from a position of considerable financial and operational
strength. Without question, our shareholders have benefited from this strength
with a purchase price that represents a 40% premium to our 90-day volume
weighted average price and exceeds the highest closing price of Mpower's stock
since our restructuring in 2002."
The boards of directors of both companies have approved the agreement and
Mpower's Board has recommended that its shareholders approve the agreement.
Mpower shareholders will be asked to vote on the proposed transaction at a
special meeting that will be held on a date to be announced. The transaction is
subject to shareholder approval and other customary conditions including
approval and receipt of applicable state and federal regulatory approvals and is
expected to be completed in late 2006. Mpower customers should not be affected
by this transaction either before or after the closing of the agreement.
Added Dick Jalkut, president and CEO of TelePacific, who will lead the combined
company in the same positions upon closing, "This transaction brings together
two solid, very well-run companies that share a focus on offering a meaningful
competitive choice to small and medium sized business customers. Mpower has an
outstanding network, great employees and a strong record in terms of product
innovation and quality of services."
Mpower was advised by Morgan Stanley and Shearman & Sterling LLP and received a
fairness opinion on the transaction from Evercore Partners. TelePacific was
advised by Brown Brothers Harriman & Co. and Credit Suisse with legal counsel
provided by Gibson, Dunn & Crutcher LLP.
About the Merger
In connection with the proposed merger, the Company will file a proxy statement
with the Securities and Exchange Commission. Investors and security holders are
advised to read the proxy statement when it becomes available, because it will
contain important information. Investors and security holders may obtain a free
copy of the proxy statement (when available) and other documents filed by the
Company at the Securities and Exchange Commission's web site at www.sec.gov. The
proxy statement and such other documents may also be obtained for free from the
Company by directing such request to the Company, Attention: Russ Zuckerman,
General Counsel, 175 Sully's Trail, Suite 300, Pittsford, New York 14534
Telephone: 585-218-6567.
The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from its shareholders in connection with the proposed merger.
Information concerning the interests of the Company's participants in the
solicitation is set forth in the Company's proxy statements and Annual Reports
on Form 10-K, previously
filed with the Securities and Exchange Commission, and in the proxy statement
relating to the merger when it becomes available.
Conference Call Tuesday, May 9th
As a reminder, Mpower will host a Webcast and conference call following the
release of its first quarter 2006 earnings.
Date: Tuesday, May 9, 2006
Time: 10:00 a.m. (Eastern time)
Audio Live Number: 1-888-332-7254, PIN #7326607
Web Cast & Audio Streaming Link/Instructions:
http://showvisuals.mshow.com/findshow.aspx?usertype=0&cobrand=128&shownumber=
297550
This link will access both the audio and PowerPoint presentation for the call.
Advanced registration on the site is recommended. Click on the link above to
register in advance and/or join the conference call at the designated time.
Web Cast Replay: Available for 30 days after the call at above link
Audio Replay: 1-877-519-4471, PIN #7326607 From Tuesday, May 9, 2006 at
1:00 p.m. Eastern through Tuesday, May 16, 2006 at 5:00 p.m.
Eastern
About Mpower Holding Corporation
Founded in 1996, Mpower Holding Corporation (AMEX:MPE) is the parent company of
Mpower Communications, a leading facilities-based broadband communications
provider offering a full range of data, telephony, Internet access and network
services for retail business and wholesale customers in California, Nevada and
Illinois. Further information about the company can be found at
www.mpowercom.com.
About TelePacific Communications
With more than 15,000 business customers, TelePacific Communications is a
leading provider of business telecommunications network solutions providing
local, long-distance, data and Internet services to small-to-medium sized
businesses in California and Nevada. Headquartered in California with local
sales consultants, service, support and facilities, TelePacific offers
solutions, provisions service and provides customer service where its customers
do business. For more information visit www.telepacific.com.
Forward-Looking Statements
Under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, certain statements contained in this press release regarding our and/or
management's intentions, hopes, beliefs, expectations or predictions of the
future are forward-looking statements. These forward-looking statements are not
historical facts and are only estimates or predictions. Actual results may
differ materially from those projected as a result of risks and uncertainties
detailed from time to time in our filings with the Securities and Exchange
Commission. We undertake no obligation to update publicly any forward-looking
statements, whether as a result of future events, new information, or otherwise.
Contacts
Mpower Communications Investor Contact: Mpower Communications Media Contact:
Gregg Clevenger, Chief Financial Officer Michele Sadwick, Vice President
Telephone: 585-218-6547 Telephone: 585-218-6542
Email: gclevenger@mpowercom.com Email: msadwick@mpowercom.com
TelePacific Contact: Rebecca Levin
Telephone: 800-865-7397 or 213-213-3622
Email: rlevin@telepacific.com