DEFM14A: Uniti Group Inc. to Merge with Windstream Holdings II, LLC in Landmark Deal

Uniti Group Inc. announces a definitive agreement to merge with Windstream Holdings II, LLC, creating a premier integrated digital infrastructure company.

Summary

• Uniti Group Inc. (Uniti) and Windstream Holdings II, LLC (Windstream) have entered into a merger agreement.
• An affiliate of Windstream will merge with Uniti, with Uniti surviving as a wholly-owned subsidiary of Windstream Parent, Inc. (New Uniti).
• Uniti stockholders will receive New Uniti common stock in exchange for their existing shares.
• Immediately following the Closing and without giving effect to conversion of any outstanding convertible securities, the redemption or repurchase of the New Uniti Preferred Stock or the exercise of the New Uniti Warrants, Uniti stockholders are expected to initially own approximately 62% of the outstanding New Uniti Common Stock.
• Windstream's pre-closing equityholders will receive New Uniti common stock, warrants, preferred stock, and cash.
• The transaction is subject to approval by Uniti stockholders and regulatory approvals.
• The special meeting of Uniti stockholders is scheduled for April 2, 2025.
• The merger is expected to close in the second half of 2025.

Sentiment

Score: 7

Explanation: The document presents a significant strategic move with potential benefits, but also acknowledges risks and uncertainties. The sentiment is cautiously optimistic.

Positives

• The merger creates a larger, more integrated digital infrastructure company.
• Uniti stockholders will receive equity in the combined company.
• The Uniti Board believes the merger is in the best interests of Uniti and its stockholders.
• The Voting Stockholders, which are affiliates of Elliott Investment Management L.P. (EIM), have committed to voting all of their Uniti Common Stock, which as of the date of this proxy statement/prospectus represented approximately 4.15% of the total outstanding shares of Uniti Common Stock in favor of the Merger.

Negatives

• The merger is subject to various conditions, including regulatory approvals, which may not be obtained.
• The Exchange Ratio is based on predetermined ownership percentages, it will not be adjusted if there is a decrease in Windstream's value prior to the Merger, and therefore Uniti stockholders cannot be sure of the value of the consideration they will receive in the Merger, if completed.
• The Exchange Ratio depends on the amount of then outstanding Uniti Common Stock and Windstream units, it will not be determined until immediately prior to the Closing.
• The Merger is expected to be taxable to Uniti stockholders for U.S. federal income tax purposes, in which case Uniti stockholders may be liable for taxes with respect to any gain recognized as a result of the Merger, even without receiving any cash.
• There are no appraisal rights in connection with the Merger with respect to Uniti Common Shares.

Risks

• The Exchange Ratio is based on predetermined ownership percentages and will not be adjusted for changes in Windstream's value.
• The Exchange Ratio depends on the amount of then outstanding Uniti Common Stock and Windstream units, it will not be determined until immediately prior to the Closing.
• The merger is subject to conditions, including regulatory approvals, which may not be obtained.
• The termination of the Merger Agreement could negatively impact Uniti and Windstream.
• There can be no assurance that Uniti will be able to obtain sufficient cash to pay the Closing Cash Payment for the Merger in a timely manner or at all.
• Stockholder litigation could prevent or delay the Closing.
• The Merger may distract Unitis and Windstreams respective management teams.
• Business uncertainties while the Merger is pending may negatively impact Unitis ability and Windstreams ability to attract and retain personnel.

Future Outlook

The merger is expected to create a premier integrated digital infrastructure company with enhanced growth opportunities and synergies.

Management Comments

• Unitis board of directors has unanimously determined that the Merger Agreement and the actions and transactions contemplated thereby, including the Merger, are in the best interests of Uniti and its stockholders.

Industry Context

The announcement relates to the telecommunications and digital infrastructure industry, where consolidation and integration are common strategies to enhance competitiveness and market position.

Related Party Transactions

• The document mentions that Elliott has interests in New Uniti that may be different from, or in addition to, the interests of New Unitis stockholders.
• The document mentions that Elliott is expected to be able to influence matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other extraordinary transactions.
• The document mentions that Elliott may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.
• The document mentions that Elliott could prioritize its New Uniti Preferred Stock holdings over its New Uniti Common Stock holdings, which could result in Elliott voting its New Uniti Common Stock in a way with which you disagree and which may be adverse to your interests.

Stakeholder Impact

• Uniti stockholders will receive New Uniti common stock and become stockholders of the combined company.
• Windstream equityholders will receive New Uniti common stock, warrants, preferred stock, and cash.
• Employees of both companies may experience changes in their roles and responsibilities.
• Customers of both companies may benefit from improved services and expanded network coverage.

Next Steps

• Uniti stockholders will vote on the Merger Proposal, the Advisory Compensation Proposal, the Interim Charter Amendment Proposal, the Delaware Conversion Proposal and the Adjournment Proposal at the Special Meeting on April 2, 2025.
• Uniti and Windstream will seek regulatory approvals from the FCC and State PUCs.
• The parties will work towards closing the merger in the second half of 2025.

Key Dates

Keywords

merger, Uniti, Windstream, stockholders, Exchange Ratio, New Uniti, Transactions, regulatory approvals, special meeting, closing