Davel Communications, Inc. Announces Completion of Merger

TAMPA, Fla., Dec. 23 /PRNewswire/ -- Davel Communications, Inc. (Nasdaq:
DAVL - news) today announced the completion of the previously announced
merger between Davel Communications Group, Inc. and Peoples Telephone
Company, Inc. (Amex: PHO - news), creating the largest independent
payphone provider in the United States, with an installed base of
approximately 83,000 payphones.

On December 22, 1998, at separate meetings of their shareholders, 94% of
the outstanding Davel common stock and 77% of the outstanding Peoples
common stock voted in favor of the merger. The two companies have merged
into the previously created holding company, Davel Communications, Inc.,
which was formed by Davel Communications Group for the purpose of
combining with Peoples Telephone. The combined company will continue to
trade on the Nasdaq National Market under the symbol "DAVL" and will
be headquartered in Tampa, Fla.

As a result of the transaction, shareholders of Peoples Telephone will
receive 0.235 shares of Davel Communications, Inc. common stock, par
value $0.01 per share, for each outstanding share of Peoples Telephone
common stock. Davel shareholders will receive one share of Davel
Communications, Inc. common stock in exchange for each outstanding share
of existing Davel Communications Group common stock. Based on Davel's
closing price of $19.13 on December 22, 1998, the transaction is valued
at $4.49 per share of Peoples Telephone common stock, or approximately
$73 million.

The Company further announced the successful completion of the cash
tender offer for Peoples' 12 1/4% Senior Notes due 2002. One hundred
percent of the $100 million principal amount of Peoples' notes were
tendered. As a result of the tender offer, the combined company will
have no public debt outstanding. In order to finance the merger and the
tender offer, Davel has entered into a new senior credit facility led by
NationsBank, N.A., BancBoston Robertson Stephens and Chase Securities,
Inc. in the aggregate amount of $280 million.

At yesterday's meeting, Davel shareholders also elected all of the
nominees to the Davel Board of 

 
Directors. In addition, Justin S. Maccarone, previously a director of Peoples
Telephone Company, was appointed to fill a vacancy on the Davel Board. Davel
also announced that it has entered into consulting agreements with several
members of Peoples' management team including E. Craig Sanders, former President
and Chief Executive Officer of Peoples, Neil N. Snyder, former Chief Operating
Officer of Peoples, and Bill Baum, former Chief Financial Officer of Peoples.

The Davel Board also approved the adoption of a shareholders rights plan
for Davel Communications, Inc. to replace the shareholder rights plan
previously in effect at Davel Communications Group, Inc.

Robert D. Hill, President and Chief Executive Officer of Davel
commented, "We are excited to have completed the merger with Peoples
Telephone. We believe that the consolidation of the payphone industry
will offer companies like Davel significant opportunities. With our
nationwide presence, resources and pool of talent we believe we are
uniquely positioned to capitalize on these opportunities. We currently
expect to realize meaningful operating synergies and cost savings as a
result of the merger, which over time should lead to enhanced value for
our shareholders."

Davel Communications, Inc. operates a system of over 83,000 installed payphones
in 48 states and the District of Columbia and provides long distance operator
services for its payphones through its digitally- switched long distance network
as well as value-added services to thousands of additional payphones throughout
the United States.

Forward-Looking Statements

Certain of the statements contained herein may be, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, forward-looking statements (rather than
historical facts) that are subject to risks and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Davel Communications,
Inc. to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Information on significant potential risks and uncertainties are set
forth more fully in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, Quarterly Report on Form 10-Q for the
third quarter of 1998 and 1998 Proxy Statement.

SOURCE: Davel Communications Group, Inc.