Regional carrier Centennial Communications Corp. lowered its stock price substantially in recent weeks as part of a process to evaluate strategic alternatives for its operations.
On Dec. 21, Centennial announced that it had completed a $550 million senior notes offering and that it would use the proceeds, along with some available cash, to offer a special dividend of $5.52 per share to Centennial’s common stockholders. When the company’s stock began trading without the dividend on Jan. 6, its stock price dropped by around $5 per share. Centennial’s stock had been trading consistently between $14 and $16 per share before Jan. 6; since the special dividend was taken out, it has traded at around $9 per share.
Centennial filed paperwork with the Securities and Exchange Commission detailing approximately $12.96 million in payouts to its executive officers with outstanding stock options, which made up for the stock’s loss in economic value due to the special payment.
Steve Kunszabo, director of investor relations for Centennial, declined to comment on whether the company was entertaining any acquisition offers. However, he said that the recent financial activity was the result of a process that started last September, when Centennial said that it was “evaluating a range of possible strategic and financial alternatives” for its operations and hired advisors to examine its options.
“We looked at a number of strategies and this … is the conclusion of that review,” Kunszabo said.
The stock price adjustment cut around one-third of Centennial’s market capitalization, which is now hovering just below $1 billion. The carrier operates a GSM/TDMA network in parts of the Southeast and Midwest.
Centennial serves more than 600,000 customers in its domestic operations and also owns wireless operations in the Caribbean. It recently reported quarterly revenue of $111 million from its U.S. operations, compared with $125 million from its network in the Caribbean. Its U.S. revenue was up 13 percent from the same quarter of last year.
