World Access to buy STAR in $650 million deal
ATLANTA, Dec 20 (Reuters) - Telephone service and equipment provider World Access Inc. (NasdaqNM:WAXS - news) said on Monday it had agreed to acquire global telecommunications services provider STAR Telecommunications Inc. (NasdaqNM:STRX - news) in a $650 million stock swap.
The deal values STAR at $10.50 per share, World Access said. STAR shares closed at 6-7/8 on the Nasdaq stock market on Friday.
''Our merger with STAR Telecommunications will significantly expand our retail telecommunications services throughout Europe and accelerate our plans to be a leading provider of bundled voice, data and Internet services in key international markets,'' World Access Chief Executive and Chairman John Phillips said.
Last week, World Access said it would buy Long Distance International, a privately-held retail telecommunications service provider, in a bid to establish itself in the European retail market. That deal, combined with the acquisition of Santa Barbara, Calif.-based STAR, will give World Access an annual revenue run rate of more than $2.3 billion, Phillips said.
Under a letter of intent signed by World Access and STAR, each STAR share would be swapped for 0.525 share of World Access. Additional consideration in the form of contingent value rights would be issued to ensure a minimum value of $10.50 per STAR share, World Access said.
Atlanta-based World Access may, at its election, pay up to 50 percent of the purchase consideration in cash.
The acquisition, which must be approved by the boards of both companies, is intended to be a tax-free reorganization and will be accounted for as a purchase.
World Access shares closed at 20-3/8 on the Nasdaq stock market on Friday. |
