http://biz.yahoo.com/ap/071221/fairpoin ... .html?.v=3
AP
Vermont Rejects $2.7B FairPoint Bid
Friday December 21, 12:26 pm ET
By John Curran, Associated Press Writer
FairPoint Rejected in $2.7 Billion Bid for Land Lines Run by Verizon in New England MONTPELIER, Vt. (AP) -- Vermont regulators rejected FairPoint Communications' proposed $2.7 billion buyout of Verizon Communications' land lines in northern New England. The ruling by the Vermont Public Service Board cited FairPoint's financial viability. "The Board found that FairPoint had not demonstrated that it would be financially sound as it seeks to operate the newly-acquired territories in Vermont, Maine and New Hampshire -- a service territory that has five times the number of access lines as Fairpoint presently has," the board said in a prepared statement. FairPoint, based in Charlotte, N.C., would have to borrow $2.5 billion to complete the transaction, the debt service on which could exert "significant financial pressure" when combined with operating costs and revenue projections, the board said. State regulators, however, left the door open to a revised bid. The board said it would reconsider the takeover under certain conditions and invited FairPoint to submit revisions that addressed some risks. FairPoint Communications Inc. sought ownership of Verizon's 1.6 million access lines, along with Internet service, in northern New England. Verizon Communications Inc. would have retained its wireless phone operations in the region. Mike Spillane, business manager for the International Brotherhood of Electrical Workers Local 2326, which represents Verizon workers in Vermont and opposed the sale, said the union's concern with the proposal was the same as that of the Public Service Board. "They did not have enough money to run the state as it should be run," Spillane said. "Where is it going to come from? The telecommunications world is wicked expensive." Fairpoint shares fell 66 cents, or 4.2 percent, to $14.99.
