PAETEC: A Communications Perspective

This morning's announcement of a planned sale of Rochester-headquartered PAETEC Holding Corp. by Windstream Corp. has set off speculation around the community as to what may or may not occur.

Having been a participant in a recent large company deal (Warburg Pincus' acquisition of Bausch & Lomb), the rumors sound familiar. Fair enough -- this type of deal breeds uncertainty and nervousness, and neither Windstream nor PAETEC will be able to immediately calm the waters.

What's likely to emerge from PAETEC in the weeks to come?

1. SILENCE. Until PAETEC issues its proxy statement to shareholders, don't expect any additional, credible details to emerge. Both companies have an obligation to share the same information with all shareholders, so any media interviews, employee meetings, or other on-the-record conversations will only repeat what's already offered up in this morning's news release.

2. REPETITION. Once the proxy is issued, the companies' communications teams will have little latitude to add color commentary to what's described in its pages. From a legal perspective, this could be viewed as providing an unfair advantage to shareholders not receiving such commentary. Instead, look for the common themes from the proxy to be repeated (in most cases, verbatim).

3. REASSURANCE. While Windstream appears to be focused on PAETEC's "network assets, an expansive fiber infrastructure, and larger data center footprint," the company will also do its best to assuage the fears of PAETEC employees. This will most likely take the form of vague reiterations of the commitment to company culture instead of delving into any specifics. Why? Because if any detail is revealed as to restructuring, staffing levels, etc. that isn't contained in the proxy agreement, the companies will be subject to shareholder suits.

Is this type of environment conducive to a positive workplace environment or community support prior to the deal close? Absolutely not. Unfortunately, there's little wiggle room if the company wants to see the acquisition approved as quickly as possible while keeping litigation to a minimum.