The telecommunications market had been hard hit by the technology stock pressure since March. NorthPoint was struggling, as were its two public peers, as the Street was cautious given the company’s significant funding needs and analyst belief that the burden remained on NorthPoint to prove it could provision lines in scale. In addition, the terms of the deal were very complex, involving share swaps, special dividend contributions and proper valuation of the Verizon DSL business. At the same time, Verizon was in the midst of contract negotiations. The subsequent strike by its workers presented a further challenge for us to communicate the value of the deal for NorthPoint.
Hill and Knowlton conducted extensive research on the competitive DSL landscape, the Street’s perception of Verizon’s DSL operations and media coverage of NorthPoint and Verizon to-date. From our research, we identified key metrics for the DSL space and determined how to combat the negative opinions about Verizon’s DSL business. Consequently, the research allowed us to develop messages to properly position the strength of the deal.
Working very closely with our PR colleagues, we communicated consistently with our Verizon counterparts to develop a cohesive and effective IR-PR campaign. We participated in weekly communications team calls, organized team meetings and updated workplans.
In the midst of a struggling telecommunications market, our objectives were to:
- accurately communicate the deal to the Street,
- generate positive media exposure for NorthPoint and
- secure shareholder support for the deal.
We communicated the value of the deal with Verizon through:
- company materials,
- media outreach and
- street perception management.
Additionally, we leveraged our existing relationships with analysts and interest in the deal to generate extensive media and analyst coverage for the announcement.
Our efforts included drafting conference call talking points, reviewing the earnings release, drafting investor call scripts, preparing Q&As, developing a merger fact sheet and coordinating efforts with Verizon IR counterparts to effectively communicate the deal to the investment community. We dispatched two executives to work exclusively with the client – one executive accompanied senior management to New York for meetings with Verizon and to prepare for the joint conference call on August 8th, and another executive was loaned to the client for nearly three weeks, managing the IR efforts in-house.
The morning of the announcement, we contacted more than 100 NorthPoint analysts and major shareholders and in the days immediately following the joint conference call with Verizon, we fielded over 90 calls from the investment community. Our post-announcement efforts included proactive analyst outreach, professional and retail investor management, analyst inquiry response, analyst follow-up and IR Web site recommendations.
Immediately following the announcement, we also assisted the client in its quarterly earnings results sequence and prepared a presentation for NorthPoint’s CEO to address the investment community at an investor conference hosted by an equity research firm.
More than ten reports/notes were issued by significant equity research analysts.
We aided our PR colleagues in securing numerous media hits, from such marquee outlets as CNNfn, The Wall Street Journal and the San Francisco Chronicle.
NorthPoint outperformed the competition on a relative basis during the week of the announcement (see After Action Report).
Individual investor interest in NorthPoint picked up dramatically – the company experienced a marked increase in telephone calls, emails and hits to the IR portion of the NorthPoint Web site from individuals requesting additional information about NorthPoint Communications.
Nearly 200 people dialed in to participate in NorthPoint’s second quarter conference – a NorthPoint record!
Trading activity was well above historical average, with over 18.5 million shares traded during the week.