Verizon's $38.50 cash offer for Frontier left a 2.5% spread with state approvals outstanding. Our model of the spread, close scenarios, IRR and the options overlay.
Long FYBR at $37.56 against a $38.50 cash offer · spread $0.94 (2.50%) · modelled break price $34.09. As of October 28, 2025.
What was left. FCC approval had been received. The CPUC (California), Pennsylvania and New York approvals were the remaining gates.
Close scenarios. We modelled early (February 27, 2026), expected (March 31, 2026), delayed (June 4, 2026) and outside-date (September 4, 2026) closes. Annualised IRR ran from about 7.7% at the early close to 6.0% at the expected close and 2.9% at the outside date.
The overlay. Covered calls and puts on FYBR, with a small Verizon tail hedge, add carry while the spread converges.
The full workbook, including sensitivity tables and option pricing, is in the PDF.
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