CenturyLink and Level 3’s shareholders “overwhelmingly” approved the two service providers’ pending merger, moving one step closer to completing a multibillion-dollar deal that will give the telco more muscle in the growing enterprise services space.
During a special meeting of CenturyLink's shareholders held on Thursday in Monroe, Louisiana, about 96.3% of the votes cast supported the proposal to issue CenturyLink common stock to Level 3 stockholders in connection with the proposed merger.
Likewise, more than 81.2% of Level 3's outstanding shares of common stock Level 3's stockholders in Broomfield, Colorado, and more than 98.8% of the votes cast, were voted in favor of approving the merger agreement.
"This expanded network should allow us to bring substantial operational and service benefits to our enterprise customers, as well as an enhanced customer experience,” said Glen Post, president and CEO of CenturyLink, in a release.
Besides gaining approvals from CenturyLink and Level 3 shareholders and previously announced state regulatory approvals and clearances in Ohio, Utah and Nevada, the companies also recently received approvals in Georgia and West Virginia and clearances in Connecticut, Indiana and Louisiana.
The acquisition will still need to clear a number of regulatory approvals, including the U.S. Department of Justice, the FCC and other state regulatory approvals and other customary closing conditions.
CenturyLink and Level 3 expect to receive the remaining state, federal and international approvals in time to complete the merger by Sept. 30, 2017.
Upon closing the deal, Level 3 shareholders will receive $26.50 per share in cash and 1.43 shares of CenturyLink stock for each Level 3 share they own. CenturyLink shareholders will own approximately 51% and Level 3 shareholders will own approximately 49% of the combined company. The combined company will be headquartered in Monroe and will maintain a key operational presence in Colorado and the Denver metropolitan area.
While gaining these approvals is a positive sign that CenturyLink has cleared another key hurdle, the pending deal has faced protest from Frontier and Windstream, two service providers that say they are concerned about Level 3’s billing practices.
Frontier, which mainly serves rural areas, said in an FCC filing (PDF) that Level 3 has not been paying its network interconnection fees in a timely manner.
Frontier contended that the "transaction will hurt rural broadband deployment and affordability both for its own customers and for other smaller providers who may not have the resources to actively comment in this proceeding.”
Likewise, Windstream said in a separate FCC filing (PDF) that it has found Level 3 has either been refusing to pay or delaying payment for millions of dollars in wholesale services.