TDS · Telephone and Data Systems, Inc.

Telephone and Data Systems, Inc. (TDS) has proposed to fully consolidate its ownership of Array Digital Infrastructure, Inc., where it currently holds 81.9% of capital stock and 95.9% of voting power, by acquiring the remaining public shares through an all-stock merger. The 0.86 exchange ratio is calibrated to yesterday's closing prices, contingent on Array distributing a $10.40 per share dividend—funded by approximately $900 million in net proceeds from prior spectrum sales totaling $1,177 million to buyers like Verizon and T-Mobile—and the closure of those sales. This structure aims to deliver an at-market valuation while providing Array minority shareholders continued economic exposure to Array's tower business alongside TDS's expanding fiber broadband operations via TDS Telecom. The proposal emphasizes operational synergies, including cost savings from eliminating duplicate corporate functions, simplified governance, enhanced share liquidity for remaining public holders, and a fortified balance sheet to fund growth in towers and fiber. TDS explicitly rejects third-party bids, prioritizing full internalization of Array, while endorsing Array's ongoing spectrum monetization. Governance safeguards include formation of an independent special committee at Array, adherence to Delaware Section 144(c) standards requiring committee endorsement and disinterested shareholder majority approval, plus TDS shareholder vote. Tax-free reorganization status is anticipated, with definitive agreements pending. TDS's retention of Wells Fargo and Sidley Austin underscores commitment to structured execution, positioning the deal as a transformative simplification amid TDS's strategic evolution.