Windstream Holdings, Inc. (NASDAQ:WIN) and EarthLink Holdings Corp. (NASDAQ:ELNK) are planning a merger to become a single company.
The merger agreement between Windstream Holdings, Inc. and EarthLink Holdings Corp. will have ELNK shareholders receiving 0.818 of WIN stock for each share ELNK share they own. This represents a 13% premium to ELNK’s closing price as of Nov. 3, 2016.
The deal is valued at $1.1 billion when including debt. Windstream Holdings, Inc. will be issuing 93 million shares of its stock to EarthLink Holdings Corp. investors. The total value of these shares sits at $673 million. This is based on the closing price for WIN stock on Nov. 4, 2016.
The deal between Windstream Holdings, Inc. and EarthLink Holdings Corp. will have the new company being almost evenly split between investors. Current WIN shareholders will own 51% of the new company and ELNK shareholders will control the other 49%.
Windstream Holdings, Inc. and EarthLink Holdings Corp. have announced that the deal has already received unanimous approval from both companies’ Board of Directors. It will still need approval from WIN and ELNK shareholders before it can be completed. Regulators will also need to approve of the deal.
Windstream Holdings, Inc. and EarthLink Holdings Corp. are expecting the merger to be completed during the first half of 2017. The new company will keep the Windstream Holdings, Inc. name and will add EarthLink Holdings Corp. executives to its management team. Its headquarters will be located in Little Rock, Ark.
WIN stock was up 1% and ELNK stock was down 9% as of Monday afternoon.
