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March 31, 2006
RESTON, VA - XO Holdings, Inc. today announced it has
mutually agreed with Elk Associates LLC to terminate the
agreement for Elk Associates to purchase the company’s
national wireline telecommunications business. As a result, XO
Holdings continues to own and operate its wireline and
wireless businesses to provide telecommunications services to
businesses and service providers.
“We continue to move
forward on our strategy to be the nation’s leading competitive
provider of voice, data and IP services to businesses. For our
customers and employees, it is business as usual,” said Carl
Grivner, CEO of XO Holdings.
On November 4, 2005, XO
had announced the agreement, as amended on March 1, 2006,
providing for the sale of the company’s national wireline
telecommunications business to Elk Associates, an entity owned
by Carl C. Icahn, XO Holdings’ Chairman of the Board and
majority stockholder, for $625 million in cash and Elk’s
assumption of $75 million of XO Holdings’ senior secured
debt.
Under the terms of the purchase agreement, either
XO Holdings or Elk Associates could elect to terminate the
agreement if the sale were not to have occurred by July 3,
2006. On March 27, 2006, Elk notified XO Holdings’ Board of
Directors that it believed that delays caused by the pending
litigation challenging the sale of the national wireline
telecommunications business would cause the closing to not
occur by July 3, 2006 and that Elk intended to exercise its
termination right if the litigation remained pending on that
date. Elk also expressed its willingness, in order to avoid
unnecessary further distractions and costs to XO Holdings, to
mutually terminate the purchase agreement without seeking any
damages or any break-up fee. After a hearing before the
Delaware Court of Chancery on March 29, 2006, and after
additional communications with plaintiffs’ counsel, on March
30, 2006, XO Holdings’ Board of Directors, on the
recommendation of its Special Committee of independent
directors, determined to mutually terminate the purchase
agreement and on March 30, 2006, XO Holdings and Elk mutually
terminated the purchase agreement effective March 30,
2006.
The company’s national wireline
telecommunications business operates under the “XO
Communications” brand and the wireless business will operate
as a separate unit under a new brand, “Nextlink”. The company
expects that XO Communications and Nextlink will sell each
other’s products and services in order to take advantage of
market opportunities to serve both business and service
provider customers.
About XO
Holdings
XO Holdings (OTCBB: XOHO.OB) is the
holding company of XO Communications, LLC and XO LMDS
Holdings. XO Communications is a leading provider of national
and local telecommunications services to businesses, large
enterprises and telecommunications companies. XO offers a
complete portfolio of services, including local and long
distance voice, dedicated Internet access, private networking,
data transport, and Web hosting services as well as bundled
voice and Internet solutions. XO provides these services over
an advanced, national facilities-based IP network and serves
more than 70 metropolitan markets across the United States. XO
LMDS Holdings, which will operate under the Nextlink brand, is
one of the nation’s largest owners of fixed wireless spectrum
covering more than 70 metropolitan markets nationwide and
provides wireless broadband services to businesses, wireless
service providers and other carriers. For more information,
visit http://www.xo.com/.
For more information contact:
Chad Couser / XO
Communications
703-547-2746
chad.couser@xo.com
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Forward Looking Statement Note
The
statements contained in this release that are not historical
facts are “forward-looking statements” (as such term is
defined in the Private Securities Litigation Reform Act of
1995) that involve risks and uncertainties. These statements
include those describing XO’s expected future business and
network operations and results of operations, XO’s ability to
continue to achieve projected synergies and revenue from the
acquisition of Allegiance Telecom’s assets, XO’s ability to
increase sales, XO’s ability to continue to implement
effective cost containment measures, XO’s ability to service
the growing demand for high-bandwidth broadband wireless
services, XO’s ability to increase sales, XO’s ability to
operate its wireline and wireless business units and XO’s
ability to comply with the financial covenants under its
senior credit facility. Management cautions the reader that
these forward-looking statements are only predictions and are
subject to a number of both known and unknown risks and
uncertainties and actual results, performance, and/or
achievements of XO may differ materially from the future
results, performance, and/or achievements expressed or implied
by these forward-looking statements as a result of a number of
factors. These factors include, without limitation, those
risks and uncertainties described from time to time in the
reports filed by XO Holdings, Inc. (as the successor issuer to
XO Communications, Inc.) with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the
year ended December 31, 2005 and its quarterly reports on Form
10-Q. XO undertakes no obligation to update any
forward-looking statements.
XO, XOptions, XOIP,
XOptions Flex, National Local Exchange Carrier, Allegiance,
Nextlink and all related marks are trademarks of XO
Communications in the United States and/or other
countries. |
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