PAGE....Sunday July 4, 12:49 pm Eastern Time
BellSouth many soon launch takeover - Barron's
NEW YORK, July 4 (Reuters) - Recent action in the bond market suggests that regional phone company BellSouth Corp. (NYSE:BLS - news) may soon launch a takeover, according to a Credit Suisse/First Boston corporate strategist who was interviewed by Barron's financial newspaper.
The strategist, Curtis Shambaugh, said that the first indication of a takeover comes from a triple-A-rated bond issued by BellSouth, which is now trading at an unusually high yield relative to Treasury bonds.
The BellSouth bonds in question, the 6-3/8 percent issue due 2028, have been trading at yields that are 1.2 percentage points above the yields on Treasury bonds, the weekly Barron's reported.
''There's an expectation that BellSouth's credit will be hurt if and when they make an acquisition,'' Shambaugh told the July 5th issue of Barron's, adding that he thinks the market may have overreacted.
Barron's said the takeover target could be Paging Network Inc., (Nasdaq:PAGE - news), whose 10 percent bonds due in 2008 rallied by about 10 points while other junk bonds improved by only one point. Barron's reported that there rumors that PageNet, the No. 1 U.S. paging service, was being eyed by BellSouth as well as by AT&T (NYSE:T - news).
In March PageNet and BellSouth's wireless data unit signed a deal for PageNet to sell the regional phone company's interactive paging service. |
