Verizon announce distribution ratio in deal with FairPoint

By Lisa Kerner

Charlotte, N.C., March 28 - Verizon Communications Inc. established the distribution ratio for the proposed spinoff of its subsidiary, Northern New England Spinco Inc., to Verizon stockholders and the subsequent merger of Spinco with FairPoint Communications, Inc.

Verizon stockholders will receive one share of FairPoint common stock for every 53.0245 shares of Verizon common stock that they own as of the March 7 record date, or 0.0189 of a FairPoint share for each share of Verizon common stock.

As previously reported, Spinco will merge with FairPoint and Spinco shares will be converted into shares of FairPoint common stock.

Spinco will hold specified assets and liabilities that are used in Verizon's local exchange business and related activities in Maine, New Hampshire and Vermont, a Verizon news release said.

FairPoint will issue about 53.8 million of its common shares to be distributed in a tax-free Reverse Morris Trust transaction to the shareholders of Verizon as well as assume roughly $1.7 billion of debt, a prior news release stated, giving FairPoint's shareholders 40% ownership and Verizon's shareholders 60% ownership of the combined company.

Verizon, based in New York, delivers broadband and other wireline and wireless communication solutions.

Charlotte, N.C.-based FairPoint is a provider of communications services to rural communities.

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