Remember Broadband Partners. GNET provides the content, CHTR and RCNC the pipe.
RCN Expanding Into Midwest
Dec 13 9:17am ET
PRINCETON, N.J. (Reuters) - RCN Corp. (RCNC.O), which is building fiber-optic networks on the East and West Coasts, said on Monday it was expanding into the Midwest with the acquisition of 21st Century Telecom Group Inc. of Chicago for $500 million in stock and debt.
The deal will extend the reach of RCN's fiber-optic networks to 3.1 million Chicago-area homes, offering phone, cable and high-speed Internet services.
The deal follows a recent $1.65 billion investment in RCN by Vulcan Ventures Inc., Microsoft co-founder Paul Allen's venture capital arm.
RCN said 21st Century is Chicago's only single-source, facilities-based provider of bundled telecommunications services.
``The addition of this market expands our coverage to nearly 42 million homes in an area that generates 44 percent of the nation's telecom traffic in only 6 percent of its geography,' said David C. McCourt, RCN chairman and chief executive.
Under a definitive agreement between the companies, 4.7 million RCN shares will be exchanged for all 21st Century shares in a tax-free swap.
Also, RCN will also offer to exchange $62 million of common stock for 21st Century's outstanding exchangeable preferred stock, and will offer to purchase 21st Century's outstanding 12-1/4 percent senior discount notes for $250 million in cash.
``Adjusted for the 21st Century transaction, RCN will have $3.6 billion in cash and available capital, enough to fund the company's aggressive network expansion and continuing operations through late 2002 and to over 4.5 million homes,' RCN said in a statement.
The deal is subject to antitrust and other regulatory approvals. |
