May 3 (Reuters) - Wireless tower owner Uniti Group said on Friday it would merge with telecom services provider Windstream Holdings, nearly a decade after their separation.

Windstream spun off Uniti in 2015 and filed for bankruptcy four years later.

The proposed deal offers Windstream shareholders $425 million in cash, $575 million of preferred equity and a 38% stake in the combined company, with Uniti shareholders owning the rest.

Some of Windstream's largest shareholders including activist investor Elliott Investment Management, which is also a holder of Uniti's equity and debt, will be rolling substantially all of their investment value in Windstream into the combined company.

"As a combined company, we will continue our disciplined growth trajectory while expanding FTTH (fiber-to-the-home) build-outs and significantly improving our overall financial profile," said Uniti CEO Kenny Gunderman.

The merger is expected to close in the second half of 2025 and the combined company will continue to operate as Uniti and be headquartered in Little Rock, Arkansas.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)