Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

Subsequent Events

25.Subsequent Events

Agreement and Plan of Merger with SureWest Communications

On February 5, 2012, we entered into a definitive agreement to acquire all the outstanding shares of SureWest Communications (“SureWest”) for $23.00 per share in a cash and stock transaction with a total consideration of approximately $340.9 million, exclusive of debt, based on our February 3, 2012 closing price.  SureWest’s shareholders may elect to exchange each share of SureWest common stock for either $23.00 in cash or shares of Consolidated common stock having an equivalent value based on average trading prices for the 20-day period ending two days before the closing of the acquisition, subject to a collar so that there will be a maximum exchange ratio of 1.40565 shares of Consolidated common stock for each share of SureWest common stock and a minimum of 1.03896 shares of Consolidated common stock for each share of SureWest common stock. Overall elections are subject to proration so that 50% of the SureWest shares will be exchanged for cash and 50% for stock.

In connection with the acquisition of SureWest, the Company received committed financing for a total of $350.0 million to fund the cash portion of transaction, to refinance SureWest’s debt and to pay for certain transaction costs. The financing package includes a $350.0 million Senior Unsecured Bridge Loan Facility, with a one year maturity and a seven year rollover to Senior Unsecured Notes

Effective February 17, 2012, in connection with the acquisition financing for the SureWest transaction, we amended our credit facility.  The amendment provides us with the ability to escrow proceeds from a high-yield note offering prior to closing the acquisition and, until closing, excludes the debt from current leverage calculations.  The amendment also permits us additional flexibility for future high yield notes issuances with the same subsidiary guarantees as the current credit facility.  All other terms, coverage and leverage ratios were unchanged.

SureWest currently serves residential subscribers and commercial businesses in the greater Kansas City, Kansas and Missouri and Sacramento, California regions.

Two putative class action lawsuits have been filed by alleged SureWest shareholders challenging the Company’s proposed merger with SureWest in which the Company, SureWest and members of the SureWest board of directors have been named as defendants.  The actions were filed on February 17, 2012and on February 24, 2012.  These actions were filed in the Superior Court of California, Placer County and allege, among other things, that each member of the SureWest board of directors breached fiduciary duties to SureWest and its shareholders by authorizing the sale of SureWest to the Company for consideration that allegedly is unfair to the SureWest shareholders and agreeing to terms that allegedly unduly restrict other bidders from making a competing offer.  The complaints also allege that the Company and SureWest aided and abetted the breaches of fiduciary duties allegedly committed by the members of the SureWest board of directors.  The lawsuits seek equitable relief, including an order to the defendants from consummating the merger on the agreed-upon terms, as well as unspecified money damages.  We believe that these claims are without merit and that the alleged damages are completely unfounded.  We intend to defend against these claims vigorously.