Citizens Communications to Acquire Commonwealth Telephone for $1.16 Billion


STAMFORD, Conn. & DALLAS, Pa.-- Sept. 18, 2006--Citizens Communications Company (NYSE: CZN) and Commonwealth Telephone Enterprises Inc. (NASDAQ: CTCO):

o Strengthens Citizens' position as a leading communications solutions provider to rural markets

o Provides market expansion and revenue growth opportunities

o Free cash flow accretive in first year

o Maintains Citizens' current dividend and reduces dividend payout ratio

o Maintains Citizens' strong balance sheet position

Citizens Communications Company (NYSE: CZN) and Commonwealth Telephone Enterprises Inc. (NASDAQ: CTCO) today announced that they have entered into an agreement for Citizens to acquire Commonwealth for $41.72 per share, in a cash-and-stock taxable transaction, for a total consideration of $1.16 billion, based on the closing price of Citizens' common stock on September 15, 2006. Each Commonwealth share will receive $31.31 in cash and 0.768 shares of Citizens' common stock, which represents a 17% premium to Commonwealth's closing share price of $35.60 on September 8, 2006, the business day prior to Commonwealth's announcement that it was exploring strategic opportunities. The acquisition has been approved by the Boards of Directors of both Citizens and Commonwealth.

Citizens intends to finance the cash portion of the transaction with a combination of cash on hand and debt. Citizens has obtained a commitment for the financing necessary to complete the acquisition from Citigroup.

The combined company will be the 7th largest local telephone exchange company in the U.S., with pro forma annual revenues of approximately $2.4 billion and operations across 23 states. Upon completion of the acquisition, Citizens, which operates under the brand name of Frontier, will have approximately 2.6 million access lines, 388,000 High-Speed Internet subscribers and 6,600 employees.

Strategic Rationale

This acquisition expands Citizens' presence in Pennsylvania and strengthens Citizens' position as a market-leading full-service communications provider to rural markets. Citizens estimates that it will achieve annual cash synergies of approximately $30 million. Synergies are expected to come primarily from the elimination of corporate overhead, overlapping functions and operational efficiencies from leveraging common systems.

The acquisition enhances Citizens' financial profile. The acquisition maintains Citizens' strong balance sheet and enhances the sustainability of the company's dividend program. Citizens is committed to continuing its current annual dividend of $1.00 per share. This transaction will improve the current payout ratio immediately. The company expects the acquisition to be accretive to free cash flow in the first full year of operation.

"Commonwealth has operated its Pennsylvania markets successfully for many years. Mike Mahoney and his team have built a strong reputation, appropriately invested in their network and cultivated positive relationships with their communities. We will build on this momentum and overlay our full-service communications products and solutions to enhance current offerings. Financially, the structure allows us to remain flexible while maintaining our strong balance sheet and improves our dividend payout ratio," commented Maggie Wilderotter, Citizens' Chairman and CEO.

"Having reviewed a number of strategic opportunities, we concluded that this was the right transaction at the right price for our shareholders and other key constituencies," said Mike Mahoney, President and CEO of Commonwealth. "Citizens has done a great job in their current Pennsylvania markets so this acquisition is a logical extension of their reach and provides economies of scale to remain competitive in the long run. We are also pleased with the strong customer and operational focus that Citizens has demonstrated with their current leadership, which we are confident will enhance the value of this transaction to all of our shareholders and other constituents."

Closing Criteria

The transaction is subject to approval by Commonwealth's shareholders, as well as the satisfaction of certain customary conditions, including Hart-Scott Rodino antitrust clearance and necessary approvals from the FCC and the Pennsylvania Public Utility Commission. The transaction is expected to close in mid 2007.

Citigroup Global Markets Inc. is Citizens' financial advisor, and Cravath, Swaine & Moore LLP is Citizens' legal counsel. Evercore Partners is Commonwealth's financial advisor and Davis Polk & Wardwell is Commonwealth's legal counsel.

Conference Call / Webcast Information

Citizens will host a conference call and webcast today, September 18th, 2006, at 9:00 AM Eastern Time to discuss the acquisition. The conference call can be accessed by dialing 1-800-322-9079 (U.S. participants) or 1-973-582-2717 (international participants), and referencing conference ID 7882500. A live, listen-only webcast is accessible through Citizens' website at www.czn.net

If you are unable to participate during the live webcast, the presentation will be archived on Citizens' website. A replay of the conference call will be available for one week by dialing 1-877-519-4471 (U.S. participants) or 1-973-341-3080 (international participants), and entering access code 7882500.

For more information about Citizens Communications, visit www.czn.net

For more information about Commonwealth, visit www.ct-enterprises.com

Investors:
Mike Bromley,Citizens Communications Company,203-614-5218

Media:
Cindy Leggett-Flynn or Gemma Hart,Brunswick Group,212-333-3810

David G. Weselcouch,Commonwealth Telephone Enterprises Inc.,570-631-2807

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