Tellabs and AFC have amended the terms of their pending merger, which was first announced on May 20, 2004. Under the terms of the amended agreement, which was approved today by both companies’ boards of directors, AFC stockholders will receive 0.504 shares of Tellabs common stock and $12.00 in cash for each AFC share. The original exchange ratio was 1.55 Tellabs shares and $7.00 in cash for each AFC share. Based on today’s closing price for Tellabs’ stock, the revised exchange ratio represents $16.60 in value per AFC share, or a total value of approximately $1.5 billion.
Upon completion of the transaction, Tellabs’ stockholders will own approximately 90% of the company and AFC stockholders will own 10%. Including synergies, Tellabs expects the transaction to be accretive to full-year 2005 pretax income on a per-share basis, excluding amortization associated with acquired intangibles and other purchase accounting adjustments.
The companies said the need to amend the original merger agreement arose following AFC’s release of its second-quarter results and outlook. http://www.tellabs.com/http://www.afc.com
