comscore Hawaiian Telcom’s parent narrows loss amid bidding war
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Hawaiian Telcom’s parent narrows loss amid bidding war

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Cincinnati Bell, the parent company of Hawaiian Telcom that is being courted by two potential suitors, reported today that its losses narrowed in the fourth quarter to $23.2 million and to $77 million for the year.

That is compared with losses of $32.6 million and $80.2 million, respectively, in the comparable year-earlier periods.

Cincinnati Bell, which acquired Hawaiian Telcom in July 2018 for $650 million in stock and cash, said it is still planning on accepting the initial bid in December from Toronto-based Brookfield Infrastructure for $2.6 billion, including debt. Brookfield is offering $10.50 a share in cash.

A competing all-cash offer in January from an undisclosed infrastructure fund is for $12 a share. Cincinnati Bell has not disclosed the identify of the fund, but the Bloomberg news service said the second offer came from Macquarie Fund.

“The Brookfield Merger Agreement remains in effect and accordingly the Cincinnati Bell board reaffirms its existing recommendation in support of the transaction with Brookfield Infrastructure at this time,” Cincinnati Bell said in a statement. “There can be no assurances that discussions with the Fund (Macquarie) will result in a binding proposal or that a transaction with the Fund will be approved or consummated.”

Cincinnati Bell said the transaction with Brookfield is expected to close by the end of this year and that unanimous approval has been received by Cincinnati Bell’s board of directors and is subject to customary closing conditions, including Cincinnati Bell shareholder approval and regulatory approval.

Shares of Cincinnati Bell are up 24.5% this year due to the competing bids. Its stock slipped 2 cents to $13.03 today. Cincinnati Bell’s stock was trading at $7.72 at the time of the first offer. Former Hawaiian Telcom shareholders were given part of Cincinnati Bell’s stock in 2018.

Meanwhile, Cincinnati Bell’s revenue slipped 2% in the fourth quarter to $390.4 million and rose 12% for the year to $1.38 billion. Hawaiian Telcom accounted for $78 million of the revenue in the fourth quarter and $314 million for 2019.

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