Consolidated Communications Reiterates Proposed Transaction Is The Best Outcome For Shareholders; Shareholders Will Avoid Risk And Maximize The Value Of Their Shares By Voting For The Proposed Transaction

Consolidated Communications Holdings, Inc. (NASDAQ:CNSL) (the "Company" or "Consolidated"), has mailed a letter to its shareholders in connection with its upcoming special meeting of shareholders (the "Special Meeting") urging its shareholders to vote "FOR" the proposed acquisition of the Company by affiliates of Searchlight Capital Partners, L.P. ("Searchlight") and British Columbia Investment Management Corporation ("BCI") (the "Proposed Transaction"). The Special Meeting is scheduled to be held on January 31, 2024. Shareholders of record as of December 13, 2023, are entitled to vote at the Special Meeting.

The full text of the letter mailed to shareholders follows:

December 27, 2023

Dear Fellow Shareholders,

You have an essential decision to make regarding the value of your investment. In order to realize the benefits of this value-maximizing transaction, the majority of our independent shareholders must support the deal. This means that your vote is extremely important, regardless of the number of shares you own. Every vote counts and is critical to the future of the Company. Not voting is the same as voting against the transaction.

The board of directors of the Company (the "Board") strongly believes the $4.70 per share cash offer from Searchlight and BCI is the best risk-adjusted outcome for shareholders and urges that you vote "FOR" the Proposed Transaction.

Proposed Transaction Offers Financially Compelling and Certain Value

• $4.70 per share in cash eliminates the real risk that shareholders face if the Company were to remain standalone
• 70% premium to Consolidated's share price as of April 12, 20231
• 89% premium to one-month VWAP2
• 18% increase in price achieved through negotiations following the initial bid from Searchlight and BCI
• Purchase price is higher than Consolidated's stock price at every point over the last year, even after Searchlight and BCI's initial bid was made public, which underscores the value of this transaction

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1 The last full trading day prior to submission of Searchlight and BCI's initial non-binding proposal.

2 Calendar day volume-weighted average prices as of April 12, 2023.

 

Transaction Multiple is Attractive Relative to Other

Incumbent Communications Provider Transactions

• The implied 9.6x LTM EBITDA multiple secured by the Special Committee is higher than ANY incumbent communications provider precedent transaction in a decade
• While the Special Committee was negotiating an increase in price, other communications providers were experiencing a material decline in value, with six of eight peers seeing share price declines3

Special Committee Undertook a Robust Evaluation of All Opportunities to Maximize Value for the Company's Shareholders

A special committee composed of independent and disinterested directors, and advised by independent legal and financial advisors (the "Special Committee"), completed a comprehensive evaluation of Searchlight and BCI's proposal, as well as all other possible go-forward alternatives.

• The process was public and highly visible from the moment Searchlight and BCI submitted their initial non-binding proposal to the Board
• The Special Committee announced a formal review of all potential strategic alternatives
• More than 35 Special Committee meetings were held to consider the transaction and possible alternatives
• 0 parties expressed interest in bidding despite a long and public process

Proposed Transaction Will Transfer Any Execution Risks to Searchlight and BCI

Consolidated's transition from copper DSL lines to fiber is competitively critical, and there is significant execution risk, especially given the deteriorating financing and operating environment. We no longer have the liquidity to fund our original growth plan, and time to market is imperative. Those who are first to the market with fiber services will be able to take and maintain a significant market share.

Following its extensive and thorough review, the Board believes this transaction is critical for Consolidated's future and represents the best risk-adjusted outcome for its shareholders.

Vote Your Shares to Maximize the Value of Your Investment

As a Consolidated Shareholder, Your Choice is Clear:

Vote "FOR" Significant, Compelling and Immediate Value.

The Special Meeting is fast approaching and is being held on January 31, 2024. The Proposed Transaction will deliver financially compelling and certain value to shareholders.

Failure to vote FOR the Proposed Transaction, including not voting at all, could result in the deal failing and Consolidated's share price falling to well below the pre-announcement price. Maximize the value of your investment and vote "FOR" the Proposed Transaction.

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3 Share price returns for select peers reflect changes since April 12, 2023, the day before Searchlight and BCI's non-binding offer was made public, through October 13, 2023, the last full trading day prior to announcement of entry into the merger agreement. Peers include Frontier Communications Parent, Inc., Lumen Technologies, Inc., Cable One, Inc., Shenandoah Telecommunications Company, ATN International, WideOpenWest, Inc., Altice USA, Inc. and Charter Communications, Inc.

Shareholders with questions or who require assistance voting their shares should contact Consolidated's proxy solicitor, Morrow Sodali. Shareholders may call toll-free: (800) 662-5200 or +1 (203) 658-9400 (international) or email [email protected].