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EXHIBIT 99
DAVEL COMMUNICATIONS GROUP, INC.
1429 Massaro Boulevard
Tampa, FL 33619
(Nasdaq: DAVL)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Michael Hayes General Information: Analyst Information: Media Contact:
(217)243-4391 Alison Ziegler Jordan Darrow Alicia Nieva-Woodgate
(212)661-8030 (212)661-8030 (212)661-8030
FOR IMMEDIATE RELEASE
July 6, 1998
DAVEL COMMUNICATIONS GROUP AND PEOPLES TELEPHONE ANNOUNCE SIGNING
OF MERGER AGREEMENT
COMBINED COMPANY WILL OPERATE OVER 125,000 PAYPHONES ACROSS THE NATION
TAMPA, FLORIDA/MIAMI, FLORIDA -- July 6, 1998, Davel Communications Group, Inc.
(Nasdaq: DAVL), and Peoples Telephone Company, Inc. (AMEX: PHO), today announced
the signing of a definitive agreement to merge the two companies. The
combination of the companies, when coupled with PhoneTel Technologies, Inc.,
with which Davel recently announced its intention to merge, will be the nation's
largest independent payphone provider, with more than 125,000 installed
payphones and pro forma 1997 revenues in excess of $320 million. The merger of
the companies is expected to result in significant cost savings from lower line
and transmission costs, lower field operating costs through more efficient
concentration of payphone routes, and elimination of redundant general and
administrative expenses.
Under the terms of the agreement, which has been approved by the Board of
Directors of each company, holders of common stock of Peoples Telephone will
receive 0.235 shares of Davel common stock for each outstanding share of Peoples
Telephone common stock. The exchange ratio is fixed and not subject to
adjustment. The companies expect the transaction to be tax-free to shareholders
of both companies. Based on Davel's closing price of $24.9375 on July 2, 1998,
the transaction is valued at $5.86 per share of Peoples Telephone common stock.
The transaction, which is intended to close in the fall of 1998, is subject to
the approval of the shareholders of both companies, receipt of required
regulatory approvals and other customary conditions. Consummation of the merger
is conditioned on its eligibility for pooling-of-interests accounting treatment.
The transaction is also subject to conversion of Peoples Telephone's convertible
preferred stock into common stock and receipt by Davel of financing for, and
successful consummation of, a cash tender offer for Peoples' 12 1/4% Senior
Notes due 2002, pursuant to which a minimum of 85% of the aggregate outstanding
principal amount of $100 million shall have been tendered. The refinancing of
the combined companies' indebtedness will be achieved through a combination of
high
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yield debt and a senior credit facility. No assurances can be given that all of
the conditions to consummation of the proposed merger will be satisfied. The
Peoples Telephone transaction is independent of and not contingent on
consummation of Davel's previously announced merger agreement with PhoneTel.
Robert D. Hill, President and Chief Executive Officer of Davel commented, "The
combination of our operations with Peoples Telephone, a recognized quality
public access leader, presents an exciting opportunity for Davel and its
shareholders. We believe that this transaction creates an opportunity to achieve
meaningful cost savings. In addition to creating significant synergy value, this
merger will provide our combined sales staff with the opportunity to market
payphone services on a truly nationwide basis. For the first time, customers
with a nationwide presence can look to a single payphone provider to fill their
public communications needs throughout the country."
Peoples Telephone is expected to become a subsidiary of the previously announced
holding company to be formed in connection with the PhoneTel combination which
will be called Davel Communications, Inc. The new company will be headquartered
in Tampa, Florida and will be operated by senior management of Davel
Communications Group. Davel's Board of Directors will be joined for a period of
one year by a representative of UBS Capital II LLC who currently serves on the
Board of Directors of Peoples Telephone.
Commenting on the merger, E. Craig Sanders, President and Chief Executive
Officer of Peoples Telephone said, "This merger, which unites Peoples Telephone
with the Davel organization, is an ideal combination that maximizes value for
our shareholders, and dramatically alters the public communications landscape.
The transaction value of $5.86 per share represents an 88% premium over Peoples
Telephone's closing price on July 2. Peoples believes that the new company, with
Sam Zell's investment, possesses the resources and complementary skills to
compete effectively in the new telecommunications environment. We anticipate
that this merger will yield route density, cost efficiencies and broad service
synergies -- making this an excellent transaction for both our customers and
stakeholders. Peoples' Telephone is excited over the prospects presented by this
combination, and we look forward to the days ahead."
Concluding his comments, Mr. Hill said, "We are fortunate to have the
management, systems and financial resources available to manage the task of
integrating these companies. By combining Peoples Telephone, PhoneTel and
Communications Central Inc. with Davel, we will have created the first
independent payphone provider to rival the size of the Regional Bell Operating
Companies' payphone operations. We further believe that our nationwide footprint
provides us with significant competitive advantages in the areas of marketing
and customer service."
Davel Communications Group, Inc. operates a system of approximately 40,000 pay
telephones in 36 states and the District of Columbia and provides long distance
operator services for its payphones through its digitally-switched long distance
network.
PhoneTel Technologies, Inc. operates a system of approximately 45,000 payphones
in 42 states and the District of Columbia.
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Peoples Telephone Company, Inc. operates a system of approximately 43,000
installed payphones in 39 states and the District of Columbia and provides
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 Group, Inc. or its successors 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 is set forth more fully in the Company's annual report on Form
10-K for the year ended December 31, 1997 and the Quarterly Report on Form 10-Q
for the first quarter of 1998.