New Street Research - FRONTIER COMMUNICATIONS PARENT INC (FYBR) BCE + Ziply: quick thoughts following the call

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New Street Research

Jonathan Chaplin

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BCE + Ziply: quick thoughts following the call

In this note we run through a full analysis of BCE’s acquisition of Ziply, and the implications for Frontier. BCE is paying a 55-117% premium to what Verizon is paying for Frontier, for an asset that is very similar. The Ziply transaction will make it harder to Frontier investors to accept $38.50, and easier for Verizon to offer more.

04/11/2024 1 EN

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FRONTIER COMMUNICATIONS PARENT INC

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New Street Research

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Analysts

Jonathan Chaplin

Other Reports on these Companies

New Street Research

FYBR: Verizon acquisition approved!

Shareholders representing 63% of the shares voted in favor of the transaction this morning. We congratulate the Frontier and Verizon management teams for getting the deal done. While we think Frontier should have received more, we recognize that most large shareholders will lock in a very substantial gain while removing uncertainty with this transaction. This is a strong win for Verizon, who will secure a great asset at a great price.

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New Street Research

Frontier vs Ziply – did BCE overpay

When examining the very significant premium that Ziply is receiving from BCE over what Frontier has been offered by Verizon, investors have asked two further questions: first, why was BCE willing to pay a higher price for Ziply than they were willing to pay for Frontier (they bid on both assets); second, how do we know they aren’t just overpaying for Ziply. We cover both questions in this brief note.

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New Street Research

Frontier vs Ziply – accounting for future opportunities

Investors are inevitably comparing the price that Verizon has offered for Frontier to the price that BCE has offered for Ziply. We have been asked whether buyers would give the operators credit for locations they haven’t deployed fiber to yet. If so, the price for Ziply isn’t so compelling, given their plans to more than double their fiber footprint. The answer: absolutely not! We walk through our thought process in this brief note.

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Yesterday the DOJ filed its proposed remedies in the Search antitrust case. The recommended divestiture of Chrome drew most of the headlines. And while potentially very negative for GOOGL (as are all proposed remedies), we don’t believe it is the most impactful to the market for general search services.

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Jonathan Chaplin

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SATS: DBS merger breaks

According to press reports, TPG will call off the merger today. For the merger to proceed, bondholders needed to agree to a debt exchange. Apparently, they have rejected the exchange. Our quick thoughts in this brief note.

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3Q24 Broadband Trends: FWA capacity limits; FWA demand limits

In this iteration of “Broadband Trends” we update our FWA capacity forecast. We also touch on early signs that demand for FWA may be limited, which could prevent mobile operators from reaching capacity limits (or force them to work harder to get there). This could have a big impact on the pace of Cable subscriber growth. Finally, we reprise our work on the competitive positioning of the various operators based on relative NPS scores.

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BCE + Ziply: quick thoughts following the call

FYBR: Verizon acquisition approved!

Frontier vs Ziply – did BCE overpay

Frontier vs Ziply – accounting for future opportunities

Alphabet (GOOGL, Buy, $213 target) Forget Chrome, 3P payments are the heart of the issue

SATS: DBS merger breaks

3Q24 Broadband Trends: FWA capacity limits; FWA demand limits

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