The lawsuit that PAETEC
The $2.3 billion stock-swap and debt-assumption deal was proposed in August. But it quickly brought suspicion that the PAETEC board of directors did not do a fair job of maximizing the value of the merger for the shareholders, that the $5.62-a-share price was too low. Some analysts felt that $7 a share was a more appropriate price. That was the impetus of the shareholder lawsuit.
To make things even stickier, earlier this month there was a rumor floating around that Level 3
The Memorandum of Understanding that settled the lawsuit called for the complaint to be dismissed without the possibility of refiling. One disclosure of the settlement was that PAETEC has an "exclusivity agreement" with Windstream, which keeps PAETEC from even considering any other bids.
All this is good news for those Windstream investors who have come to rely on the company's steady dividend stream, with a projected yield of 8.9%. Like many small telecoms, such as Frontier Communications
Twixt cup and lip
There's just one more hurdle for Windstream to jump over for this merger to get settled once and for all: Later this month, the PAETEC shareholders will finally get to vote on it. To follow these companies and keep up with what happens, put Windstream and PAETEC on your watchlist. It's really the best way to make sure you don't lose track of the outcome.
Fool contributor Dan Radovsky owns shares of Frontier Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Why Tesaro, Archrock, and Windstream Holdings Slumped Today
The first day of 2018 looked good for the market, but these stocks missed out. Find out why.
The 4 Worst Tech Stocks of 2017
Frontier Communications, Synchronoss Technologies, Windstream Holdings, and Pandora Media crashed and burned this year.
Why Windstream Holdings, Inc. Stock Jumped 10.2% Higher Today
The asset-less telecom appears to have settled some of its tricky debt refinancing projects, but there's much more work left to do.