NTELOS Holdings Corp.
Robbins Arroyo LLP: Acquisition of NTELOS Holdings Corp. (NTLS) by Shenandoah Telecommunications Company (SHEN) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP are investigating the proposed acquisition of NTELOS Holdings Corp. (NASDAQ: NTLS) by Shenandoah Telecommunications Company (NASDAQ: SHEN). On August 10, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Shenandoah will acquire NTELOS. Under the terms of the agreement, NTELOS shareholders will receive $9.25 for each share of NTELOS common stock.
Is the Proposed Acquisition Best for NTELOS and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at NTELOS is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $9.25 merger consideration represents a premium of only 25.3% based on NTELOS’ closing price on August 7, 2015. This premium is below the average one day premium of nearly 28.8% for comparable transactions within the past five years. Further, the $9.25 merger consideration is significantly below the target price of $12.00 set by an analyst at Drexel Hamilton LLC on December 3, 2014, and $10.00 set by an analyst at UBS on December 2, 2014. In the last three years, NTELOS traded as high as $23.03 on November 6, 2013, and most recently traded above the merger consideration – at $9.30 – on November 14, 2014.
On July 28, 2015, NTELOS reported strong earnings results for its second quarter 2015. Revenues increased 6% to $91.4 million for the second quarter 2015, compared to $86.1 million for the second quarter 2014. Net subscriber additions for the six months ended June 30, 2015 of 15,400 exceeded net subscriber additions for the full year 2014 of 14,600. NTELOS beat consensus analyst estimates for sales in four out of the last four quarters. In commenting on these results, NTELOS Chief Executive Officer Rod Dir remarked, “nTelos’s increased focus on being competitive in our local markets, strong retail offerings and expanded 4G LTE network continue to drive robust subscriber growth. During the first half of 2015, we more than doubled net adds over the same period last year and surpassed the halfway point of our LTE network build out, ahead of schedule. With ample liquidity evidenced by our quarter end cash balance of over $146 million, an improving cost structure and a more focused operating plan, we are well positioned to continue unlocking value and enhancing our competitive position within our Markets.”
In light of these facts, Robbins Arroyo LLP is examining NTELOS’ board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
NTELOS shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
NTELOS shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.