jchaulk RE: MCLL
Saw your post about going long on MCLL..Thought this might interest you...
thedailydeal.com
Metrocall's PageNet bid halted
by Shanon D. Murray
smurray@thedailydeal.com
Metrocall Inc.'s last-ditch effort to acquire bankrupt Paging Network Inc. was halted by a federal judge Thursday.
Persuaded by a parade of attorneys who expressed their opposition to Metrocall's efforts, U.S. District Judge Gregory M. Sleet
PageNet is the nation's largest paging company, while Arch is No. 2.
"It appears that Metrocall's bid is not superior to or even equivalent to Arch's," Sleet said before ruling in the U.S. Bankruptcy Court of Delaware. "There is no disagreement in the room.
"The court does not think it's prudent or appropriate to substitute its judgement for other subjects who have been engaged in this process," the judge said after attorneys representing PageNet's stakeholders said they didn't want to hear anything more from Metrocall.
PageNet's confirmation hearing is set for Oct. 26, and company officials said the merger is expected to close 10 days later.
PageNet and Arch agreed to merge in November 1999. The deal has already received the necessary approvals from the Federal Communications Commission and other regulators.
A merger with Arch would give the unsecured creditors 84.9 million shares of the company. Also, the creditors would get common stock worth 60.5% interest in Vast Solutions, PageNet's data services subsidiary, which is scheduled to be spun off.
PageNet stockholders would get 5 million shares of Arch and a 20% interest in Vast.
J. Roy Pottle, Arch's executive vice president and chief financial officer, said it would be extremely difficult for Metrocall to interfere with the deal after the judge's ruling.
"I am unaware of any avenue they could pursue," Pottle said.
In his arguments for the motion to end exclusivity, Metrocall attorney Jeffrey Sabin said the agreement between PageNet and Arch made it impossible for a competing bid to be considered.
Sabin requested that the judge allow Metrocall to file its proposal as a "backstop" to the deal with Arch.
"We are confident that, when the PageNet plan comes before you, it will not [meet the requirements for confirmation]," Sabin told the judge.
Under Metrocall's revised bid, PageNet's bondholders were to have received $100 million in cash, 106.8 million shares of Metrocall common stock and 81% of the equity of Vast.
PageNet's secured creditors were to get $75 million in cash and new secured notes as part of a consolidated bank facility for $671.5 million, together with the proceeds from the disposition of the capital stock of PageNet's Canadian subsidiary.
Metrocall said it has secured $337.5 million of binding financial commitments for an acquisition of PageNet, including $105 million in new common equity, $57.5 million in new senior unsecured notes with warrants and $175 million in connection with the sale of PageNet spectrum licenses to Nextel Communications Inc.
Metrocall said it has obtained the commitments from Nextel, Aether Systems Inc., PSINet Inc., SunAmerica Inc., John Hancock Financial Services Inc. and Canyon Partners Inc.
Shanon D. Murray is a reporter at The Daily Deal. She can be reached at: (202) 429-2992 or smurray@thedailydeal.com |
