=DJ Digital Island Stk-2: Deal Seen As Pseudo Sandpiper IPO
NEW YORK (Dow Jones)--When Digital Island Inc. (ISLD) decided to
acquire Sandpiper Networks Inc., investors seized the opportunity to
get in on the public debut of a private Internet-related company.
For the second day in a row, the merger has fueled Digital Island's
stock movement. Earlier, the shares hit a new 52-week high of 54 1/2,
up from the previous ceiling of 40 7/16 set July 7.
Monday, Digital Island agreed to acquire Sandpiper in a stock swap.
The two companies will combine their technologies to create a single
offering for businesses setting up global e-commerce transaction
services or putting content out on the Internet.
"This deal is part pseudo 'IPO' of Sandpiper's proprietary
content-distribution business," Lehman Brothers Inc. analyst William
Garrahan wrote in a research note.
As evidenced by their trading frenzy, investors are looking at this
merger as Sandpiper's debut into the public market from being a
privately held entity, according to First Albany Corp. analyst Jeff
Sadler.
By buying Digital Island shares, investors are participating in a
stock behaving like the initial public offering of an Internet-related
issue.
Following a 68.2% jump Monday, shares of Digital Island recently
traded at 49 1/2, up 10 13/16 or 27.9%, on volume of 10.2 million,
compared with a daily average of 766,300.
(MORE) DOW JONES NEWS 10-26-99
02:17 PM
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