Amid financial questions, Tellabs said late Tuesday (Sept.7) that it has amended an acquisition agreement with AFC, a move that will cut approximately $4 million off an acquisition deal announced in May.
In May, Tellabs said that it would provide AFC stockholders with 1.55 shares of Tellabs common stock and $7 in cash for each AFC share. Based on Tellabs' closing price at the time, the deal would have been valued at approximately $1.9 billion.
Now, Tellabs plans to provide AFC stockholders with 0.504 shares of Tellabs common stock and $12 in cash for each AFC share. Based on yesterday's closing price for Tellabs, the deal is valued at approximately $1.5 billion.
The revised transaction comes after Tellabs conducted a further review and analysis of AFC's business and financial outlook following AFC's release o its second-quarter results. Based on that review, Tellabs said both companies agreed to amend the merger agreement.
Upon completion of the transaction, Tellabs' stockholders will own approximately 90 percent of the company and AFC stockholders will own 10 percent. The transaction is subject to closing conditions, including regulatory approval and approval by Tellabs' and AFC's stockholders. It is expected to close in the second half of 2004.