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ZHNE/PDYN: Zhone Technologies to Acquire Paradyne Networks
Zhone Technologies, Inc. (ZHNE) announced that it will acquire Paradyne Networks, Inc. (PDYN). The transaction is subject to the approval of each company's stockholders, regulatory review as well as other customary closing conditions. The transaction is currently expected to close in the fall of 2005. The time, location and other details regarding each company's stockholders meeting will be communicated to stockholders at a later date.
Under the terms of the agreement, Zhone will issue 1.0972 shares of Zhone common stock for each outstanding share of Paradyne common stock, and each option, warrant and other security exercisable or convertible into Paradyne common stock will be assumed by Zhone and become exercisable or convertible into Zhone common stock, with appropriate adjustments based on the merger exchange ratio. Based on Zhone's closing price yesterday, the transaction is valued at $3.917 per Paradyne common share. On a fully-diluted basis, the current stockholders of Paradyne will own approximately 36.8% of the combined company and the current stockholders of Zhone will own approximately 63.2% of the combined company. The proposed stock-for-stock transaction is intended to qualify as tax-free to the stockholders of Paradyne.
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