This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Level 3 Swipes TW Telecom for $7.3B

Stocks in this article: LVLT TWC

NEW YORK (The Deal) -- Network operator Level 3 Communications (LVLT - Get Report) announced a massive fiber grab Monday with the $7.3 billion purchase of TW Telecom (TWTC).

Level 3 will pay $40.86 per share in cash and stock. The deal values TW Telecom's total equity at $5.7 billion and includes $1.6 billion in the target's net debt.

Shares of TW Telecom rose $3.88, or 10.7%, to $40.22 on Monday morning. Level 3 stock initially gained more than 1%, but declined $2.23, or 5%, to $41.86.

The deal is the first major acquisition by CEO Jeff Storey, Wells Fargo Securities LLC analyst Jennifer Fritzsche observed in a Monday note.

"Recall, when [Storey] started in this role, the messaging and direction from the board was less on M&A and more on bottom line and [free cash flow] focus," she wrote.

She described TW Telecom's assets as the "crown jewel" of metropolitan fiber networks and that Level 3 may have felt pressure to make a bid "before other private players get public currency and carriers such as [CenturyLink Inc.] look to do more deals."

The analyst did not identify specific private groups. Acquisitive fiber networker Zayo Group LLC is said to be gearing up for an initial public offering.

UBS analyst John Hodulik valued the deal at 11.5 times TW Telecom's 2015 Ebitda.

Advising Level 3 were Eric Medow of Citigroup Inc. and Bank of America Merrill Lynch bankers Steve Baronoff, Mark Bush and Scott Tolchin.

Christopher Lawrence of Rothschild provided a fairness opinion.

Level 3 received counsel from Willkie Farr & Gallagher LLP lawyers David Boston and Laura Delanoy.

Lone Tree, Colo.-based TW Telecom retained a team from Evercore Partners Inc. led by Michael Price, and Wachtell, Lipton, Rosen & Katz lawyers Steven Rosenblum and Stephanie Seligman.

Singapore Technologies Telemedia Pte Ltd, which owns 23% of Level 3, received advice from Bill Raincsuk of Credit Suisse Securities (USA) LLC.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs