Story Stocks^®

Cincinnati Bell (CBB 10.36, +2.64, +34.3%) is a telecommunications services company with operations in Ohio, Kentucky, Indiana, and Hawaii. It is also one of today's best-performing stocks following the news that it is going to be acquired by Brookfield Infrastructure Partners (BIP 49.00, +0.64, +1.3%) in a $2.6 billion transaction, including debt. CBB shareholders will have a right to convert their stock to $10.50 per share in cash at closing, which is expected by the end of 2020.

The latter may seem like a long time to wait, but judging by the fact that the stock is trading within a whisker of the conversion price, it is fair to say CBB shareholders are content to wait and do not expect the deal to be blocked by regulators while they wait. 

The positive response to the acquisition news has been underpinned by the following considerations:

• The offer price represents a handsome 36% premium over Friday's closing price, never mind the sub-$4 stock price seen in August after yet another disappointing earnings report.
• This acquisition will create a stronger company that can move more quickly to upgrade, and expand, its networks and services than it would have been able to do as a standalone company.
• The cash offer eliminates downside price risk that accompanies an all-stock offer from an acquirer.
• The transaction is set to proceed on friendly terms as it has won unanimous approval from CBB's board of directors.

CBB has made a huge move today, but it remains miles away from the sky-high territory of $200 per share it reached during the dot-com boom in early 2000. It is also a far cry from the $15-30 price range the stock traded in for the better part of the last 16 years.

The acquisition news and "premium" then isn't as uplifting as one might think for a large class of shareholders who, it is also fair to say, probably feel as if they have had their bell wrung by this stock.