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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 10, 1998
COMMNET CELLULAR INC.
(Exact name of registrant as specified in charter)
Colorado 0-15056 84-0924904
(State or other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
8350 East Crescent Parkway 80111
Suite 400 (Zip Code)
Englewood, Colorado
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (303) 694-3234
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Item 5. Other Events.
CommNet Cellular Inc. (the "Company") announced on February 10, 1998
the closing of the merger (the "Merger") of AV Acquisition Corp., an affiliate
of The Blackstone Group's Blackstone Capital Partners II Merchant Banking Fund
L.P., with and into the Company. The Company also announced the completion of
its tender offers (the "Offers") to purchase for cash all of its outstanding
11 3/4% Senior Subordinated Discount Notes Due 2003 (the "Discount Notes") and
all of its outstanding 11 1/4% Subordinated Notes due 2005 (the "Subordinated
Notes," together with the Discount Notes, the "Notes"). The Company has accepted
for payment all Notes validly tendered and not properly withdrawn pursuant to
the Offers.
The Company has issued a press release announcing the closing of the
Merger and the completion of the Offers, which press release is filed herewith
as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(c) The following exhibits are filed with this report:
99.1 Press Release dated February 10, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
COMMNET CELLULAR INC.
Date: February 12, 1998 By: /s/ Daniel P. Dwyer
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Daniel P. Dwyer
Chief Financial Officer
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Exhibit 99.1
CommNet Cellular Closes Merger with Affiliate of The Blackstone Group
One of the Largest Rural Cellular Providers in Transaction Valued at $718
Million
ENGLEWOOD, Colo., Feb. 10 /PRNewswire/ -- CommNet Cellular Inc.(Nasdaq:
CELS - news) announced today the successful closing of the merger of AV
Acquisition Corp., an affiliate of The Blackstone Group's Blackstone Capital
Partners II Merchant Banking Fund L.P., with and into CommNet.
The acquisition of this 87% interest in CommNet by affiliates of The Blackstone
Group, the New York-based private investment bank, and its co-investors involves
approximately $142 million of new equity in a transaction with total value of
approximately $718 million.
"We were attracted to this transaction because it offered a unique opportunity
for Blackstone to acquire one of the largest rural cellular providers in the
United States," observed The Blackstone Group's President and CEO, Stephen A.
Schwarzman. "The Company's rural cellular markets have lower penetration levels
than urban cellular markets and therefore should continue to experience higher
growth rates, which will continue to build value for the Company and its
investors."
Adds Blackstone Senior Managing Director Mark T. Gallogly, "CommNet's management
team is strong and experienced, with the in-depth local knowledge needed to
operate for optimum efficiency in these rural markets. As a result of low
population density in rural markets and high buildout costs, we anticipate that
competition from PCS will be slow to materialize."
At the closing of the CommNet transaction, CommNet's Chairman, President and
CEO, Arnold C. Pohs noted, "The closing of this transaction is the culmination
of a year-long quest to have the true value of our Company realized. With
affiliates of The Blackstone Group as our majority owner and partner, we will
now be even better able to achieve the full potential of the opportunities
before us in our rural cellular niche."
Select, targeted telecommunications investments have been one of several
investment themes in the development of Blackstone's private equity fund
portfolios in recent years. A corporate partnership with cable industry leader
TCI to acquire that company's Kentucky cable systems was announced last year by
Blackstone Capital Partners III, a private equity fund with approximately $4
billion in capital. Previously, an affiliate of Blackstone Capital Partners II
formed a joint venture with Time Warner Entertainment and Fanch Communications
to own and operate non-urban cable systems in six states.
CommNet shareholders could elect to receive $36.00 in cash for each of their
shares or to retain their existing CommNet common stock. The election was
subject to proration so that 588,611 of the outstanding CommNet shares would be
retained by existing shareholders and the remaining shares would be exchanged
for cash. As CommNet shareholders elected to retain approximately
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2.7 million shares, only 21.9 percent of such shares will be retained, on a pro
rata basis, by those shareholders who had elected to continue to hold stock.
CommNet also announced that it has successfully completed its tender offers (the
"Offers") and consent solicitations with respect to its outstanding 11 3/4%
Senior Subordinated Discount Notes Due 2003 (the "Discount Notes") and its
11 1/4% Subordinated Notes due 2005 (the "Subordinated Notes," and together with
the Discount Notes, the "Notes"). As of 5 p.m., New York City time, on the
February 9, 1998 expiration date of the Offers, $176.6 million of the
approximately $176.7 million aggregate principal amount at maturity of the
Discount Notes had been tendered and all of the approximately $80 million
aggregate principal amount of the Subordinated Notes had been tendered. CommNet
has accepted for payment all Notes validly tendered and not properly withdrawn
pursuant to the Offers.
CommNet operates, manages and finances cellular telephone systems in which its
subsidiaries and affiliates hold ownership interests. CommNet owns interests in
82 markets located in 14 states with a proportionate interest in 3.6 million
pops. CommNet is the manager in 56 of these markets with a total population of
4.2 million residing in nine contiguous states in the mountain and plains
regions. These managed markets represent one of the largest geographic
collections of contiguous wireless systems in the United States.
The Blackstone Group was founded in 1985 by its current Chairman, Peter G.
Peterson and its current President and CEO, Stephen A. Schwarzman. In addition
to sponsoring the largest recently-raised private equity fund for corporate
investments, The Blackstone Group is also a leader in real estate investing, as
well as Mergers & Acquisitions and Restructuring & Reorganization advisory
services, and liquid alternative asset investing.
