Let's dig into the fine print of this merger arbitrage. In September 2024, Verizon announced its intention to acquire Frontier in an all-cash deal at the aforementioned price tag of approximately $20 billion, which equates to $38.50 per share. Notably, the management teams believed the deal would take approximately 18 months to clear approval by Frontier shareholders and regulators.
Finally, if the deal doesn't go through because of regulatory concerns, Frontier's stock price may fall. However, Verizon will likely be required to pay a $590 million breakup fee to Frontier.