CHICAGO, Sept. 27, 2011 /PRNewswire/ -- Telephone and Data
Systems, Inc. [NYSE: TDS, TDS.S] today issued the following
comments in response to the Glass, Lewis & Co., LLC ("Glass
Lewis") and the Institutional Shareholder Services' ("ISS") reports
regarding the proposed amendments to the TDS certificate of
incorporation. The proposals include a share consolidation
amendment to reclassify TDS Special Common Shares as Common Shares
on a one-for-one basis, resulting in a single class of
publicly-traded common stock, and a vote amendment, which will set
the Series A Common Shares voting rights at current levels.
Glass Lewis Report
"We are pleased that Glass Lewis recognized the merits of our
proposals," said Kenneth R. Meyers,
TDS Executive Vice President and Chief Financial Officer. "We
strongly believe that the proposed one-for-one exchange ratio is
fair and appropriate and that the proposed amendments will simplify
our capital structure, provide all shareholders with improved
liquidity and visibility, and give TDS greater financial and
strategic flexibility."
In its report, Glass Lewis noted that "...voting structures
involving multiple classes of stock are not in the best interest of
shareholders" and that, "...investors will benefit from the clarity
of having to evaluate only a single class of publicly-traded
stock."
ISS Report
Commenting on the ISS report, Meyers said, "We strongly disagree
with ISS' recommendation that holders of our Common Shares vote
against the proposed amendments. The economic rights of the
two share classes are equivalent, the exchange ratio is consistent
with precedent transactions, and we believe the proposals will
benefit all shareholders significantly. We also believe the
holders of Common shares will benefit from the share consolidation
because the newly consolidated share class will have improved
liquidity, thus providing potential access to additional indexes
and broader investment appeal. We believe that by
recommending that Common shareholders vote against the proposal,
ISS is asking Common shareholders to forego the benefits and accept
the risk of losing their liquidity advantage in the future."
The ISS report concludes, and we agree, that, "...the board is
rightly concerned about the persistent trading discount of TDS.S"
and that, "...there are tangible benefits for the company as a
whole in simplifying the capital structure, and it is clear why the
board is considering such an action."
Commenting on the ISS recommendation, Meyers said, "We saw three
reclassification precedents that had similar structures to ours
with Common Shares and Special Common Shares, where the higher vote
stock traded at a greater than 10 percent premium to the lower,
no-vote stock. In two of those situations, the
reclassification ratio was one-to-one and ISS recommended in favor
of each of those transactions. In the third transaction, a
market ratio was used and ISS split its recommendation. ISS'
current position ignores these precedents.
"ISS also noted that the TDS Common stock declined at
announcement, and since announcement, in excess of various market
indices. However, market volatility has been unusually high
in the wireless arena. Looking at stock price performance
since one week prior to the announcement, the TDS Common stock is
down less than its three primary comparables: Sprint, MetroPCS and
Leap."
The TDS Board of Directors unanimously approved the amendments
and unanimously recommends that shareholders vote "FOR" the
proposals at its special meeting of shareholders, to be held on
October 6, 2011.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 500® company,
provides wireless, local and long-distance telephone, and broadband
services to approximately 7.1 million customers in 36 states
through its business units, U.S. Cellular (wireless) and TDS
Telecom (wireline). Founded in 1969 and headquartered in
Chicago, TDS employed 12,300
people as of June 30, 2011.
Visit www.teldta.com for comprehensive financial information,
including earnings releases, quarterly and annual filings,
shareholder information and more.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995: All information set forth in this news
release, except historical and factual information, represents
forward-looking statements. This includes all statements about the
company's plans, beliefs, estimates and expectations. These
statements are based on current estimates, projections and
assumptions, which involve certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Important factors that may affect these
forward-looking statements include, but are not limited to: the
ability of the company to successfully grow its markets; the
overall economy; competition; the access to and pricing of
unbundled network elements; the ability to obtain or maintain
roaming arrangements with other carriers; the state and federal
telecommunications regulatory environment; the value of assets and
investments; adverse changes in the ratings afforded TDS and U.S.
Cellular debt securities by accredited ratings organizations;
industry consolidation; advances in telecommunications technology;
uncertainty of access to the capital markets; pending and future
litigation; changes in income tax rates, laws, regulations or
rulings; acquisitions/divestitures of properties and/or licenses;
and changes in customer growth rates, average monthly revenue per
unit, churn rates, roaming revenue and terms, the availability of
handset devices, or the mix of products and services offered by
U.S. Cellular and TDS Telecom. Investors are encouraged to consider
these and other risks and uncertainties that are discussed in the
Form 8-K used by TDS to furnish this press release to the SEC,
which are incorporated by reference herein.
For more information about TDS
and its subsidiaries, visit the web sites at:
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TDS: www.teldta.com
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TDS Telecom: www.tdstelecom.com
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USM: www.uscellular.com
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IMPORTANT INFORMATION:
The foregoing information is not a solicitation of a proxy from
any TDS shareholder. This is being done only pursuant to a
definitive proxy statement. Additional information relating
to the foregoing is included in TDS' proxy materials filed with the
SEC and distributed to shareholders. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ SUCH MATERIALS BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Shareholders and other investors may access
such materials without charge at the SEC's web site (www.sec.gov)
and on the TDS web site (www.teldta.com) in the Investor Relations
section on the SEC filings page. In addition, shareholders may
obtain free copies of the proxy materials by contacting TDS' proxy
solicitor, MacKenzie Partners at (800) 322-2885. TDS and its
executive officers and directors may be deemed to be participants
in the solicitation of proxies from TDS shareholders on behalf of
the TDS board of directors in connection with the foregoing.
Information concerning such participants and their respective
direct or indirect interests in TDS by security holdings or
otherwise is included in TDS' definitive proxy statement.
SOURCE Telephone and Data Systems, Inc.