Shares of our Buzz Stock of the Day — D&E Communications (Nasdaq: DECC) — were up more than 52 percent in mid-day trading on the Nasdaq today after news broke that the company would be acquired by U.S. local telephone company Windstream Corp. (NYSE: WIN) for about $330 million.
As part of the deal, D&E shareholders will receive 0.650 shares of Windstream stock and $5 in cash for each share held, Windstream said in a statement.
Based on Windstream stock’s Friday closing price, the deal values D&E Communications at $10.88 per share, a premium of about 61 percent to its Friday closing of $6.75, D&E Communications said in a separate statement.
Pennsylvania-based D&E Communications provides services including high-speed Internet, local and long distance telephone, video and professional IT services.
The acquisiton is expected to close in the second half of 2009 and add free cash flow in the first full year and reduce dividend payout ratio, according to Windstream.
“This merger combines best-in-class products and services of two great integrated communications providers,” said D&E’s president and CEO, James Morozzi The result ensures a strong and vibrant company that is well-positioned to serve our customers, shareholders and employees today as well as in the future.”
According to Windstream president and CEO, Jeff Gardner, the D&E’s reach will help Windstream “significantly expand” its operations in Pennsylvania and “provide the opportunity to grow cash flow, reduce our dividend payout ratio and create value for shareholders and customers.”
Shares of Windstream were down 2.6 percent at mid-day trading on the New York Stock Exchange.