Analysts optimistic about Windstream exit from bankruptcy and end of Uniti dispute

Positive reviews come after Windstream Holdings Inc. announced last week that it had lifted the chains from bankruptcy.

“Windstream comes out of restructuring, UNIT came out of purgatory on Monday,” reads an analysis by investment firm Raymond James, using the stock symbol for Uniti Group Inc., which is also expected to benefit from Windstream’s fresh start .

Another investment firm called Windstream’s exit a “breakthrough” that will uplift the two Little Rock companies.

More importantly, the long-standing legal dispute between the two companies over a rental agreement is finally resolved – for good and for the benefit of everyone involved.

“This formally resolves all causes of actions and claims brought by either party and takes into account all disputes between Windstream and its creditors during the bankruptcy proceedings,” Uniti said in a press release after Windstream said it was not being monitored for bankruptcy.

The statement “makes it very clear” that the legal issue is resolved and that the two companies can cooperate and produce long-term benefits for both, Raymond James’ note said.

Since Windstream created Uniti in a spin-off in 2015, the two have functioned as if they were hip reunited, with an analyst following Uniti comparing the relationship to the movie “The Defiant Ones,” where two convicts escaped are chained and must learn to cooperate in order to survive.

Windstream needs Uniti’s fiber optic network to provide broadband services to rural areas and Uniti needs Windstream to keep the doors open – Uniti still derives about 65% of its revenue from Windstream.

“Much of the blows on [Uniti] pre-trial was around Windstream’s potential for bankruptcy, and with that eliminated, we think [Uniti] can see material upside down, ”analyst Frank Louthan wrote in the Raymond James report.

Windstream comes out of bankruptcy as a private company with $ 4.7 billion in revenue, over $ 4 billion in debt reduced and an additional $ 2 billion in new capital available to invest in its services and products.

As for Uniti, it has gained ground since a federal bankruptcy judge approved the network lease settlement with Windstream in May. The company’s shares have doubled since the end of April and Raymond James’ rating predicted the momentum will continue, noting that Uniti is “up significantly from current levels.”

As it comes out of bankruptcy as a private company, Windstream’s majority owner is Elliott Management Corp., a New York-based hedge fund that controls about 40% of the company and most of the seats on the new board. administration of the telecommunications company.

In Raymond James’ research report, Louthan noted that the new property is expected to yield positive results.

“Within 3 to 5 years, we believe that shareholders should have created significant value with Windstream and much of it will go to [Uniti] as well as the owner of most of the network, ”wrote Louthan.

Along with Windstream’s exit from bankruptcy, Elliott Management also made headlines last week by doing a play for Cubic Corp., which responded by adopting a poison defense to avoid a takeover.

Elliott took a 15% stake in the San Diego-based company which provides services to the international transportation and defense markets. Elliott told Cubic he is teaming up with another private equity fund to buy the rest of the company.

Cubic then adopted the poison pill, known as the shareholder rights plan, to delay the takeover. Cubic stocks jumped 27% on the news and have since risen.

The Reuters news service reported on Wednesday that Elliott and buyout firm Veritas Capital had made a joint offer to buy Cubic.

Elliott Management told this reporter in July that the investment in Windstream was part of an expansion of the fund’s private equity investments. Cubic’s offer appears to follow this approach, as do the firm’s negotiations to buy the Swiss company that makes Otis Spunkmeyer cookies.

AGRICULTURAL ASSISTANCE

Arkansas rice, wheat and peanut farmers can now apply for federal help under a coronavirus relief program.

For the first time, the US Department of Agriculture is expanding the list of eligible products under the Coronavirus Food Assistance Program. The extension includes up to $ 14 billion in available aid.

This is the second round of funding for the program, which provides financial assistance to farmers whose businesses have been directly affected by the coronavirus pandemic.

The deadline to apply is December 11. More information is available at https://www.farmers.gov/cfap.

INVESTMENT IN WILDLIFE

Arkansas offers more than $ 735,000 in grants to school districts to promote and encourage wildlife education in the state.

“Education is fundamental to economic development,” Commerce Secretary Mike Preston said. “These funds not only support improved educational opportunities, but they also help us preserve our state’s wildlife for the enjoyment of future generations.”

The grants are intended to enhance learning opportunities for young people, especially in rural areas where available education funding is low.

School districts can use the grants for the study of general fish and wildlife conservation issues, workshops, archery programs, sport shooting programs, and fishing education efforts, among others.

The funds can also be used for field trips to Game and Fish nature centers, conservation education centers and wildlife management areas.

Visit www.arkansasedc.com for more information.

TEAMING UP

Little Rock’s marketing agency Mangan Holcomb Partners and its sister company, Team SI, are joining forces to better promote their “TraDigital” services to clients.

Sharon Tallach Vogelpohl, who was president of both entities, adds the title of managing director in the new structure. The agency will be renamed and named MHP / Team SI.

Chip Culpepper will continue as Chief Creative Officer, Lannie Byrd as Chief Operating Officer and Alex Hood as Chief Technology Officer.

Former CEO David Rainwater remains a partner of the new entity and Team SI founder Tim Whitley will be the CEO of the parent company which owns MHP / Team SI and other entities.

MHP / Team SI is a fully integrated communications company with over 130 employees. The agency has two offices in Arkansas, its main office in the Riverdale neighborhood of Little Rock and another in Rogers.

Ideas for columns or recommendations? Any thoughts or reflections to pursue? Contact me at [email protected] or at (501) 378-3567.

About Marc Womack

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