Tomorrow already looks like a sunny day!!!
Fez
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Wednesday September 1 9:15 PM ET
Global Crossing, Frontier Up On Bid Talk
NEW YORK (Reuters) - Shares of merger partners Global Crossing Ltd (Nasdaq:GBLX - news). and Frontier Corp. (NYSE:FRO - news) rose in after-hours trading Wednesday after a report that Global had raised its offer for Frontier in an effort to insure completion of the telecommunications merger.
Global Crossing shares rose 1-1/4 to 25-1/4 after hours, traders said, while shares of Frontier rose 1/2 to 42-3/4.
The activity followed a report on the CNBC cable news channel cited unnamed sources close to the deal as saying that Global Crossing, an undersea fiber-optic cable operator, raised the exchange ratio in its offer to two of its shares for each share of Frontier, a local and long-distance telephone company.
Representatives of Global Crossing and Frontier could not be reached for comment.
Global Crossing in March offered to buy Frontier for $11 billion in stock, or $63 a share. Under the old offer, Global would exchange no more than 1.7939 of its shares for each share of Frontier.
The value of that offer has decreased significantly as Global Crossing shares have fallen, from over $50 a share the day before the deal was announced, to its closing price of $24 Wednesday.
``Global Crossing needs this deal. They're at the point right now that Qwest (Communications International Inc.) was right before it bought LCI (International). It instantly gave them customers and revenues and traffic and all of a sudden they were a player, not just a good idea,' said Jeffrey Kagan, an independent telecommunications analyst based in Atlanta.
Qwest, which like Global Crossing built a high-capacity network but initially had little traffic for it, bought LCI in June 1998 for $4.4 billion, more than doubling its size.
``I think it was expected that they (Global Crossing) were going to increase their offer and do whatever it takes, within reason, to get this deal done,' he added. He said there was some expectation that Global Crossing might add cash to the offer, which would be viewed as sweeter due to the volatility in its stock price.
Bermuda-based Global Crossing's new offer requires Frontier, based in Rochester, N.Y., to drop its walk-away provision, which allows Frontier to back out of the deal should Global Crossing's stock decline, CNBC said. |
