Newton Independent

Windstream says it will focus on broadband

Newton Independent

Windstream Corporation CEO Jeff Gardner told a national TV audience on Tuesday that the Little Rock, Ark.-based company will continue to focus efforts on broadband.

Gardner appeared on CNBC's "Fast Money" where he noted the company now sees about 53 percent of its revenue coming from broadband, compared to about 35 percent when the company was spun off from Alltel in 2006.

Windstream, which recently completed its $1.2 billion acquisition of Newton-based Iowa Telecom, has applied for a $238 million stimulus grant to expand broadband across rural areas of the country.

Watch the video here.

Windstream announces Iowa Education Connections program

Newton Independent

Windstream announced today the inception of its Iowa Education Connections program, a community giving initiative aimed at enhancing educational opportunities at schools and charitable organizations in Iowa through funding for technology upgrades.

Windstream said it will award $70,000 to educational programs at schools and non-profit organizations that impact Iowa's communities.

"We are thrilled to introduce Iowa Education Connections and have the opportunity to connect with the Windstream community in Iowa," said Ric Crane, Windstream's chief marketing officer. "Our standing commitment to educational enhancement through technology donations is important to Windstream, and we look forward to furthering that initiative in the newest addition to our coverage area."

An individual or community member may nominate an organization for Iowa Education Connections. Nominated organizations will be notified by Windstream and encouraged to submit an online application. Organizations not nominated can still apply for the program.

The deadline to apply is Sept. 3. Eligibility, nomination and application information can be found online  here.

Eight finalists will be chosen in October and a public online vote will determine the top four organizations to be awarded charitable donations from Windstream, with three runner-up organizations to receive $15,000 each and one grand prize winner to receive $25,000.

The Iowa Education Connections program is being promoted in Iowa this week through Windstream's mobile tour, called the Lifetime Tour. The company's vintage 1953 green pick-up truck will make stops in Grinnell, Knoxville and Newton and also travel to Manchester on Friday to participate in RAGBRAI activities.

More information on the Lifetime Tour can be found here.

Windstream to keep headquarters in Arkansas

Newton Independent

Windstream Corp., said Tuesday that it plans to keep its headquarters in Little Rock, Ark., and add 200 jobs in the area over the next few years.

The telecommunications firm, which recently acquired Iowa Telecom, will receive $5.5 million in state cash incentives to bring the new jobs to Arkansas.

Windstream, which plans to continue its strategy of acquiring companies, was formed in 2006 as a spinoff of Alltel's wireline business and merger with Texas-based Valor Communications Group.

You can read the story here.

Windstream to sell $400 million in bonds to pay debt

Newton Independent

Windstream Corp., said today that it planned to offer $400 million in bonds in a private placement with the Senior Notes due in 2018.

The offering is expected to be completed by the end of July, the rural telecommunications provider indicated.

Windstream expects to use the proceeds to repay outstanding indebtedness.

On June 1, the company closed a deal to acquire Iowa Telecom of Newton in cash, stock and debt payment deal valued at roughly $1.2 billion. Windstream paid Iowa Telecom shareholders $260 million in cash and Windstream stock valued at $284 million. It also paid approximately $613 million in outstanding Iowa Telecom debt.

Fitch Ratings assigned a "BB+" rating to the notes.

Final settlement hearing in Iowa Telecom/Windstream class action suits set

By PETER HUSSMANN

A final settlement hearing is set for Sept. 23 in Jasper County District Court in the class action lawsuits filed by six former Iowa Telecom shareholders opposed to the Newton-based company's merger with Arkansas-based Windstream Corporation.

The six individual class action lawsuits claimed Iowa Telecom and Windstream, as well as the company board members, breached their fiduciary duties to shareholders in agreeing to the merger. The actions were filed in both Jasper County District Court and the Federal Court for the Southern District of Iowa.

In agreeing to settle the case, Iowa Telecom and Windstream make no admission or concession of the truth of any of the allegations. However, the attorneys for the plaintiffs were allowed to review and comment on a revised securities registration form filed in connection with the merger that included information not contained in the initial S-4 form filed with the Securities and Exchange Commission as part of the merger.

"The settlement provided for the disclosure of additional information by Iowa Telecom regarding the merger in the revised S-4 that was filed with the SEC on Feb. 18," the preliminary stipulation states. "Plaintiffs believe disclosure of such information was necessary in order for Iowa Telecom shareholders to make an informed vote on the proposed merger."

Specifically, the revisions include:

• the financial interests of certain persons involved in the merger.
• the reason why Windstream voluntarily moved its stock exchange listing from the New York Stock Exchange to the NASDAQ.
• expected operating expense and capital expenditure savings as a result of the merger.
• Windstream's expected debt leverage ratio.
• background on the merger.
• reasons why the Iowa Telecom Board recommended approval of the merger.
• JP Morgan's payment terms with Iowa Telecom
• Windstream's reasons for the merger.

The settlement does not provide for any additional benefits to shareholders other than what was previously agreed to under the terms of the $1.2 billion merger deal that was completed on June 1.

Iowa Telecom shareholders received 0.804 shares of Windstream stock and $7.90 in cash per each Iowa Telecom share in the transaction. Windstream issued approximately 26.7 million shares of stock valued at $284 million, based on the company's closing price on May 28, and paid approximately $260 million in cash as part of the transaction.

Windstream also repaid all of Iowa Telecom's outstanding debt, which was approximately $613 million.

In his order issued Tuesday, District Court Judge Greg Hulse gave Iowa Telecom and Windstream until July 15 to mail notice of the proposed settlement to all shareholders of record from the close of business on Nov. 23, 2009 (the date the merger agreement was signed) until the July 15 notice date.

In addition, the notice of settlement must be posted on a publicly available web site and printed in abbreviated form twice per month from July 15 to Sept. 23 in the Wall Street Journal and Des Moines Register.

Lawyers for the six plaintiffs will be paid attorney fees by Windstream not to exceed $525,000.

Judge Hulse's order setting out the dates for the settlement to be completed followed a court hearing in Jasper County District Court last Thursday.

Windstream sues Nebraska over new rule requiring pro-rated billing

Newton Independent

Windstream Corp., the Arkansas-based company that recently completed the takeover of Newton-based Iowa Telecom, has filed suit against the Nebraska Public Service Commission over a recent rule change concerning final billing practices.

According to a news story out of Lincoln, Neb., the new rule was put into effect this month in response to Windstream's start of a practice last year where it stopped pro-rating or billing for partial month's service.

The PCS adopted a new rule that requires companies to immediately stop billing when someone stops or cancels a service and then offer a pro-rated refund.

According to the report, Windstream contends in its suit that the new rule "interferes with ... (its) legal rights and privileges to bill for its telecommunications services on a monthly basis."

Windstream also says the PSC overstepped its authority in enacting the rule, the news report states.

You can read the story here.

Windstream cuts 35 positions from Newton

Newton Independent

Two days after completing its acquisition of Iowa Telecom, Windstream Corporation announced today the elimination of 35 positions at its Newton facility effective Aug. 2.

Windstream made the announcement in a press release this morning stating the action was being taken as part of an announcement of plans to restructure the Iowa and Minnesota properties acquired in the $1.2 billion buyout of the Newton-based company.

In addition to the 35 positions in Newton, Windstream said it plans to eliminate another 25 positions in other parts of the former Iowa Telecom's service areas.

The positions are primarily in accounting, finance, regulatory and marketing, the press release stated.

"The restructuring follows a detailed review of overall functions at Iowa Telecom to identify redundancies and leverage existing workgroups within Windstream," said Brent Whittington, chief operating officer.

Employees affected by the job losses can apply for other open positions within Windstream. The company will also provide severance benefits to eligible employees, along with outplacement services.

Previously, Iowa Telecom announced that those employees losing their jobs in the first year following the merger that they would be given 60-day advance notice.

Former Iowa Telecom executives, directors paid more than $8.5 million in merger

By PETER HUSSMANN

Former Iowa Telecom executives and board members cashed in more than $8.5 million in shares on Tuesday as the merger of the Newton-based telecommunications firm with Arkansas-based Windstream Corporation was completed.

The 16 executives and board members were paid $7.90 for each share of Iowa Telecom held and received 0.804 shares of Windstream stock for each Iowa Telecom share as part of the $1.2 billion merger agreement that also had the Little Rock company pay off more than $600 million in Iowa Telecom debt.

Former Chairman and CEO Alan Wells led the way receiving more than $3.4 million as part of the merger agreement that also places him on the board of directors of Windstream.

Craig Knock, former Iowa Telecom vice president, chief financial officer and treasurer, also topped the million dollar mark.

The disposal of their shares was reported on Form 4 reports filed on Tuesday with the Securities and Exchange Commission. Following is a list of the shares disposed at $7.90 each as reported by the former Iowa Telecom executives and directors on their change of beneficial ownership reports:

Alan Wells - CEO - 442,438 shares - $3,495,260
Michael Struck - VP sales - 41,269 shares - $326,025
Kendrik Packer - Director - 21,078 - $166,516
Brian Naaden - VP, CIO - 40,100 shares - $316,790
Timothy Lockhart - VP, HR - 27,531 shares - $217,494
Craig Lang - Director - 3,000 shares - $23,700
Craig Knock - VP, CFO - 171,461 shares - $1,354,541
Dennis Kilburg - VP Engineering - 71,938 shares - $568,310
Lynn Horak - Director - 3,000 shares - $23,700
Lon Hopkey - VP, Corp. Development - 60,973 shares - $481,686
Donald Henry - VP, General Counsel - 75,896 shares - $599,578
Brian Hart - Director - 6,000 shares - $47,400
Norman Frost - Director - 9,000 shares - $71,100
Kenneth Cole - Director - 3,000 shares - $23,700
Charles Bruggemann - VP Operations - 51,807 shares - $409,275
Mike Anderson - VP External Affairs - 54,049 shares - $426,987

The most recent Security and Exchange Commission filings, as well as past filings outlining past executive stock sales, can be read here.

Windstream completes acquisition of Iowa Telecom

Newton Independent

Iowa Telecom employees became Windstream Corp., associates today as the Little Rock, Ark.-based company announced the completion of its acquisition of the Newton-based telecommunications firm in a deal valued at $1.2 billion.

Iowa Telecom shareholders received 0.804 shares of Windstream stock and $7.90 in cash per each Iowa Telecom share in the transaction. Windstream issued approximately 26.7 million shares of stock valued at $284 million, based on the company's closing price on May 28, and paid approximately $260 million in cash as part of the transaction.

Windstream also repaid all of Iowa Telecom's outstanding debt, which was approximately $613 million.

Iowa Telecom Chairman and CEO Alan Wells was appointed to the board of directors of Windstream, effective with the closing of the transaction.

Over the course of the next several months, Windstream will work to transition Iowa Telecom into its operation.

Employees were told in a memo from Wells last month that as the transition unfolds, some Iowa Telecom workers will likely lose their positions, though Windstream has said it will retain a presence in the community, most likely through an expanded call center.

A hearing is set June 10 in Jasper County District Court to finalize the settlement agreements reached in the class action lawsuits filed by shareholders against the merger.

Iowa Telecom employees told of pending transition to Windstream

By PETER HUSSMANN

When Iowa Telecom employees return from the long Memorial Day holiday they will officially become employees of Windstream Corporation, the Arkansas-based company that is buying the Newton-based telecommunications provider.

Employees were told in a memo from CEO Alan Wells this week that the FCC recently issued a statement approving the merger and that "Legal Day One" will be June 1.

Over the course of the next two weeks, employees were told, meetings will be held with Windstream representatives in order to complete a smooth transition.

"Remember, Windstream will rely heavily on its former Iowa Telecom employees to contribute to a smooth transition," the memo states. "The company is already committed to continuing our great service levels, as well as community oriented events such as RAGBRAI and the Iowa State Fair. Windstream will look to the Iowa Telecom veterans to both continue to deliver the quality of service our customers have come to expect and to successfully introduce the new Windstream brand in a positive, engaging way."

The memo also addressed the elimination of positions at Iowa Telecom as the merger moves forward.

"Of course, one of the greatest concerns among some employees is the prospect of a layoff," it stated. "Windstream is well aware of your concerns and intends to communicate its long-term plans as soon as possible, including both the potential for and timing of any downsizing. Should your position be eliminated within the first year following the merger, you will receive a severance package as previously outlined, as well as a 60-day advance written notice."

The memo concludes by noting the strength of the culture at Iowa Telecom, a factor that attracted Windstream's purchase of the Newton firm.

"Windstream is very mindful of our hard-working Iowa Telecom culture: it is, in fact, one of the key things that attracted their interest in Iowa Telecom," the memo states. "Your efforts have contributed significantly to the success of Iowa Telecom, and will, in turn, provide great value to the expanded and improved Windstream."

Iowa Telecom declares final interim dividend in anticipation of completing merger

Newton Independent

Iowa Telecom on Tuesday declared its final interim dividend on its common stock in anticipation of the closing of the Newton-based company's merger with Windstream Corporation.

The board of directors declared a dividend of $0.0022418 per share of common stock, per day, from and including April 1 (the first day of the current fiscal quarter) until and including the closing date of the merger, provided the closing date is prior to July 1. The dividend is contingent on the closing of the merger.

Iowa Telecom said in its release announcing the dividend that the merger is expected to close on June 1, assuming satisfaction of all the conditions to the merger.

Late last month, the Iowa Utilities Board gave its consent to the merger. A Jasper County District Court hearing to settle shareholder lawsuits over the merger, however, has been pushed back from later this week to early June.

On Nov. 23, 2009, Iowa Telecom entered into the merger agreement with Windstream where Iowa Telecom shareholders will receive $7.90 in cash and 0.804 shares of common stock of Windstream in a deal valued at $500 million. Windstream also agreed to assume approximately $600 million in Iowa Telecom debt bringing the total deal to $1.1 billion.

If the merger is completed on June 1, the final dividend will be $0.138 per share. When combined with the 25 cent dividend declared by Windstream's board of directors on May 5, shareholders will receive approximately the same dividend that Iowa Telecom has been paying in recent quarters.

The final dividend will be payable as soon as practicable after the closing date of the merger to shareholders of record as of the close of business on the last business day immediately preceding the closing date of the merger.

Windstream gives assurances on continued Newton presence

By PETER HUSSMANN

State regulators were given assurances that Windstream will maintain Iowa Telecom's Newton campus following the merger of the two companies, one of the considerations regulators used in granting approval of the Little Rock-based company's acquisition of the Newton telecommunications firm.

Late last month, the Iowa Utilities Board entered an order granting the merger of the two companies in a $1.1 billion cash, stock and assumption of debt deal following testimony from the two companies on the impact of the combined operation.

Windstream and Iowa Telecom officials told state regulators that a combined company would provide the economies of scale that will make Iowa Telecom more financially stable, provide additional product offerings to customers, keep rates stable and maintain service quality standards.

"The board finds that the public interest will not be detrimentally affected by the proposed transaction," the April 30 order states.

However, Windstream testified to state regulators that "there will be some changes in staffing" after the merger is approved, though an expansion of the call center operations is likely.

"Windstream testified that the customer service operation will not see any material changes in the staffing of local operations, technicians, or sales personnel," the order says. "It appears that it is not likely that Windstream will reduce its technicians, staffing for the call center in Newton, or staffing to maintain timely response to customer complaints."

Windstream also testified to state regulators that it will review the Newton call center's operation and capacity for growth with the idea of expanding its use.

"Windstream claimed that given the call center's presence in the Central Time Zone and current successful operation, it is reasonable to believe Windstream would want to expand the Newton call center to include other Windstream markets after the companies' systems are fully integrated," the order states.

In granting approval, the Utilities Board did acknowledge that "there are some unknowns with this merger," including the precise number of employees who will lose their jobs.

"Windstream explained that while there is no set figure for how many employees will lose their jobs, Windstream is starting a lengthy study that will review which functions will remain local," the docket order states. "The results will not be known for months.

"Iowa Telecom testified that Windstream will maintain Iowa Telecom's Newton campus which has come to symbolize economic development in that community."

Utility board members also noted the severance packages planned to be offered to displaced corporate staff. Employees who will be eliminated within a year of the close will receive at least a 60-day notice prior to termination and a severance package with no less than eight weeks of base pay up to 26 weeks, based on years of service.

The merger is expected to be completed by mid-year.

Merger of Iowa Telecom into Windstream Corp. approved by IUB

By PETER HUSSMANN

The Iowa Utilities Board late this afternoon issued a press release that approves the merger of Iowa Telecom into Windstream Corporation noting that it "provides an opportunity for stability in rates and jobs, and expansion of services, in Iowa."

The 32-page order filing, released after 5 p.m. today, states that it "appears Iowa Telecom's overall financial position will improve as a result of the merger." The IUB continues by saying it is "reasonable to believe its debt leverage, ability to attract capital (as part of a larger company), and cash flow and scale of cash flow will improve."

The IUB board said that agreeing to the merged companies "the reorganization will not cause rates to increase or sacrifice service quality."

During testimony provided to the Utilities Board during its oversight of the merger consideration, Windstream testified that the merged operations "will continue to maintain a strong local presence in the service area," the Utilities Board press release states.

"With respect to the effect of the reorganization on current operations, Iowa Telecom stated that the customer call center in Newton will be expanded," the IUB press release states. "Personnel there will receive the same general pay and benefits as employees are currently receiving.

"There will be some staffing changes, but none that impair customer service. No material change to the staffing of local operations, technicians, or sales personnel will be made. No Iowa Telecom asset is to be removed from Iowa or transferred to a non-regulated environment other than certain wireless spectrum that may be sold. There should be no changes to the billing or customer service operation in Newton."

During the testimony provided the Utilities Board, Windstream testified that its high-speed internet service will remain a key component of its future business plans

"In general, the merger appears to provide better resources for building and maintaining Iowa Telecom's existing wireline operations while expanding its offering of residential and business products, including plans for next generation data products and diversified communications and entertainment options," the IUB press release states. "It is also an opportunity for increasing existing Iowa Telecom penetration rates and customer retention while enhancing the overall capabilities of both companies."

The Newton Independent will look further into the findings of the full order in a post on Thursday. Finalization of a settlement over class action lawsuits filed in connection with the matter is scheduled for later this month.

Wells sells more Iowa Telecom stock

By PETER HUSSMANN

Iowa Telecom President and CEO Alan Wells sold additional shares of company stock last month in three separate sales that netted more than $900,000, a Securities and Exchange Commission filing notes.

A Form 4 Change of Beneficial Ownership filing date April 15 shows Wells disposed of a total of 55,800 shares at prices ranging from $16.75 to $16.92 for a total of approximately $939,000.

The report shows that Wells still has direct ownership of more than 500,000 shares of company stock.

Earlier in April, Wells disposed of more than 23,000 shares at $16.70 for a total of approximately $391,000, an SEC filing states.

The Newton-based telecommunications firm is continuing to finalize details of the $1.1 billion cash, stock and assumption of debt buyout by Windstream Corporation of Little Rock, Ark. Upon completion, Wells will become a member of the board of directors of Windstream.

Settlement of lawsuits over Iowa Telecom merger again delayed

By PETER HUSSMANN

Lawyers involved in the class action lawsuits brought by shareholders in connection with Iowa Telecom's purchase by Windstream were again unable conclude their proposed settlement at a hearing in Jasper County District Court on Friday.

District Court Judge Gregory Hulse set May 21 as the date of another hearing for preliminary approval of the class settlement in the four lawsuits filed in Jasper County District Court following the merger announcement last November.

Six class action lawsuits were filed after the Nov. 24 merger announcement claiming Iowa Telecom, its board of directors and Windstream Corp., breached their fiduciary duty to shareholders by undervaluing the price received for the company. Four of the suits were filed in Jasper County District Court with the other two filed in U.S. federal court in Des Moines. The federal cases are being stayed pending an outcome in the district court cases.

In early February, Iowa Telecom announced a tentative settlement of the suits by agreeing to "make certain revisions to the disclosure in the proxy statement." No changes in the merger or the terms of the merger will be made and no additional payments will be made to shareholders as part of the proposed settlement, the agreement states.

After the parties receive final approval of the settlement, the class action lawsuits will be voluntarily dismissed, the proposed settlement agreement reached in early February indicated.

Iowa Telecom, in announcing its first quarter earnings today, said the merger is still on track to be completed by mid-2010. The cash, stock and debt assumption buyout is valued at $1.1 billion.

Iowa Telecom reports increased sales

By PETER HUSSMANN

Iowa Telecom reported first quarter results today that shows increased revenues and sales from the same period a year ago but a decline in net income as the company lost another 3,900 access line subscribers in the first three months of the year.

Operating revenues for the quarter were $67.4 million compared to $61.3 million in the first three months of 2009. Net income was $4.1 million compared to $4.5 million in quarter-over-quarter comparisons.

The company said its total access lines decreased by 3,900 during the first quarter of 2010 compared to the fourth quarter of 2009. Incumbent local exchange carrier lines decreased by 3,000 while competitive local exchange carrier lines dropped 900 for the quarter. DSL internet subscribers increased by 700 while video subscribers increased by 400. Long distance subscribers decreased by 3,200 while dial-up internet subscribers decreased by 1,100.

Alan Wells, Iowa Telecom's CEO, said the company was "pleased" with the results.

"We're pleased with our results for the quarter, which reflect the stability of our business," he said. "Despite the challenging economic environment, our revenues and adjusted (earnings) increased sequentially over the fourth quarter of last year. We ended the quarter with 249,100 total telephone access lines, as well as 155,000 long distance subscribers, 95,900 DSL subscribers, 27,500 video subscribers and 9,100 dial-up subscribers."

Wells said Iowa Telecom's merger with Windstream is proceeding as planned after shareholders voted overwhelming in late March to approve the $1.1 billion cash, stock and debt assumption merger agreement. The merger is expected to close by the middle of 2010 conditioned on the receipt of governmental consents.

The full release can be read here.

Iowa Telecom officers get stock awards

By PETER HUSSMANN

The day after Iowa Telecom shareholders voted overwhelmingly to sell the Newton-based communications firm to Windstream Corp., its 10 corporate officers received a total of 207,000 shares of company stock that they each sold a portion of days later for a total of nearly $865,000.

The acquisition and disposal of company shares by Iowa Telecom officers is shown in recently filed Securities and Exchange Commision statement of change in beneficial ownership of securities filings on behalf of each of the individuals.

On March 25, Iowa Telecom shareholders cast 97.8 share approval of the adoption of the merger agreement. The deal calls for Windstream to acquire Iowa Telecom in a cash, stock and debt assumption agreement valued at approximately $1.1 billion.

Under the merger agreement, each outstanding share of Iowa Telecom stock will be converted into the right to receive $7.90 in cash and 0.804 shares of common stock of Windstream. The Little Rock, Ark.-based company will assume approximately $500 million in Iowa Telecom debt.

The merger is expected to close by mid-year subject to regulatory approval by the Federal Communications Commission and the Iowa Utilities Board. 

The issuance of company stock to Iowa Telecom officers was noted in a previous SEC filing concerning the merger agreement and the financial arrangements impacting its officers.

Following is a list of the shares acquired by the Iowa Telecom officers on March 26, the amount each disposed of on April 1 at a sale price of $16.70 per share and the number of shares still retained, according to the SEC filings:

Alan Wells - President and CEO
Acquired - 100,000
Disposed - 23,447
Price - $391,564.90
Shares Retained - 558,288

Michael Struck - Vice President sales
Acquired - 8,000
Disposed - 1,987
Price - $33,182.90
Shares Retained - 41,715

Brian Naaden - Vice President and CIO
Acquired - 2,000
Disposed - 3,001
Price - $50,116.70
Shares Retained - 40,749

Craig Knock - Vice President, CFO and Treasurer
Acquired - 35,000
Disposed - 7,057
Price - $117,851.90
Shares Retained - 172,677

Dennis Killburg - Vice President Engineering
Acquired - 2,000
Disposed - 1,929
Price - $32,214.30
Shares Retained - 72,432

Lon Hopkey - Vice President Corporate Development
Acquired - 15,000
Disposed - 3,104
Price - $51,836.80
Shares Retained - 61,467

Donald Henry - Vice President, General Counsel, Secretary
Acquired - 21,000
Disposed - 4,705
Price - $78,573.50
Shares Retained - 76,545

Charles Bruggemann - Vice President Operations
Acquired - 8,000
Disposed - 2,601
Price - $43,436.70
Shares Retained - 55,246

David M. (Mike) Anderson - Vice President External Affairs
Acquired - 8,000
Disposed - 2,031
Price - $33,917.70
Shares Retained - 54,698

Tim Lockhart - Vice President Customer Service, Human Resources
Acquired - 8,000
Disposed - 1,906
Price - $31,830.20
Shares Retained - 57,802

Iowa Telecom shareholders approve merger

Newton Independent

Shareholders of Iowa Telecom voted overwhelmingly today in favor of the proposed merger with Windstream Corporation.

In a press release issued this afternoon, Iowa Telecom said of the shares voted at today's special meeting, 97.8 percent were cast in favor of the adoption of the merger agreement.

Late last year, Iowa Telecom announced plans to merge with Windstream in a cash, stock and debt assumption agreement valued at approximately $1.1 billion.

Under the merger agreement, each outstanding share of Iowa Telecom stock will be converted into the right to receive $7.90 in cash and 0.804 shares of common stock of Windstream. The Little Rock, Ark.-based company will assume approximately $500 million in Iowa Telecom debt.

The merger is expected to close by mid-year subject to regulatory approval by the Federal Communications Commission and the Iowa Utilities Board.

Shareholder vote on Iowa Telecom merger set Thursday; settlement hearing on class action suits set for April

By PETER HUSSMANN

A special meeting of the board of directors of Iowa Telecom will be held at 10 a.m. Thursday at its Newton headquarters building to determine whether shareholders approve a proposal to merge with Windstream Corporation.

Iowa Telecom shareholders have been provided information on the proposed $1.1 billion buyout of the Newton-based telecommunications firm in a cash, stock and assumption of debt offer that calls for holders to receive $7.90 in cash and 0.804 shares of Windstream stock for each share of Iowa Telecom stock held. Based on Windstream's closing price today, that would place the value of each Iowa Telecom share at $16.92. Iowa Telecom closed down 16 cents today at $17.04.

The deal includes Windstream's assumption of about $500 million in Iowa Telecom debt.

The two companies announced the merger in November of 2009. The companies had been in negotiations for some time, as spelled out in the proxy information provided to shareholders.

The materials provided to shareholders also spell out how the merger will benefit top executives  of Iowa Telecom, including its chief executive officer, Alan Wells, who will become a member of the Windstream board of directors upon successful completion of the merger, as well as receive more than $6 million from sale of his shares and other employment benefit contracts he has in place.

The proxy also notes that Iowa Telecom employees will be given 60-day advance notice and receive as much as half a year in salary severance payments should their positions with the Newton-based company be eliminated as a result of the merger. Iowa Telecom serves approximately 428 communities in Iowa and Minnesota and employs about 800 people.

Thursday's vote on the merger will come in advance of the final settlement of the six class action lawsuits brought by Iowa Telecom shareholders after the Nov. 24 merger announcement.

The lawsuits, the first of which was filed the day the merger was made public, claim Iowa Telecom, its board of directors and Windstream Corp., breached their fiduciary duty to shareholders by undervaluing the price received for the company, an assertion Iowa telecom denied in approving the settlement agreement. Four of the suits were filed in Jasper County District Court with the other two filed in U.S. federal court in Des Moines.

In February, Iowa Telecom announced a tentative settlement of the suits by agreeing to "make certain revisions to the disclosure in the proxy statement" mailed to Iowa Telecom shareholders in connection with approval of the merger. No changes in the merger or the terms of the merger will be made and no additional payments will be made to shareholders as part of the proposed settlement, the agreement states.

 A hearing has been set for April 23 in Jasper County District Court for "the preliminary approval of the class settlement" in the four Jasper County cases. The federal cases have been stayed until an outcome on the settlement of the district court cases is reached.

Settlement of class action lawsuits over Iowa Telecom merger delayed

By PETER HUSSMANN

Lawyers involved in the class action lawsuits brought by shareholders in connection with Iowa Telecom's purchase by Windstream were unable conclude their proposed settlement at a previously scheduled hearing in Jasper County District Court on Wednesday.

District Court Judge Gregory Hulse issued an order on Wednesday stating that "counsel for plaintiff shall submit a new schedule order with seven days of this order," apparently stalling conclusion of the proposed settlement reached between the parties last month.

The time frame set by the judge puts the schedule order due date just one day before Iowa Telecom shareholders are scheduled to vote on the merger proposal. The Newton-based telecommunications company previously set March 25 for a shareholder vote on the $1.1 billion in cash, stock and debt assumption merger plan.

Six class action lawsuits were filed after the Nov. 24 merger announcement claiming Iowa Telecom, its board of directors and Windstream Corp., breached their fiduciary duty to shareholders by undervaluing the price received for the company. Four of the suits were filed in Jasper County District Court with the other two filed in U.S. federal court in Des Moines.

In February, Iowa Telecom announced a tentative settlement of the suits by agreeing to "make certain revisions to the disclosure in the proxy statement" to be mailed to Iowa Telecom shareholders in connection with approval of the merger. No changes in the merger or the terms of the merger will be made and no additional payments will be made to shareholders as part of the proposed settlement.

After the parties receive final approval of the settlement, the class action lawsuits will be voluntarily dismissed, the proposed settlement agreement reached in early February indicated.