Could this merger be the reason for our decline today?
Concentric soars on Nextlink merger
By Tiffany Kary ZDII
Internet-access provider Concentric Network Corp. raced ahead 35 percent Monday, chasing the premium put on its stock by Nextlink Communications Inc., which will buy the company for $2.9 billion in stock.
Concentric (Nasdaq: CNCX) jumped 10 9/16 to 40 9/16, or 35 percent. Nextlink (Nasdaq: NXLK) shares lost 1 to 77 1/2 following the news. Concentric's stock has been hovering around its 52-week high of 57 5/8 since it beatestimates in its third quarter.
Concentric shareholders will receive $45 in Nextlink stock for each share -- a 50 percent premium to Concentric's stock price. Under the deal, which is subject to a collar, if Nextlink shares rise above $90.91 a share, Concentric shareholders will receive 0.495 share of Nextlink stock for each Concentric share. If Nextlink stock falls below $69.23, Concentric shareholders will receive 0.65 share of Nextlink.
The deal will give telephone services company Nextlink the ability to expand its offerings beyond voice services and provide high-speed Internet access and other data services. Nextlink is backed by cellular telecommunications pioneer Craig McCaw. The Nextlink-Concentric transaction is the latest combination of a phone carrier and an Internet company.
Phone.com, Inc. (Nasdaq: PHCM) recently bought @Motion Inc. to add voice portal technology to its current services.
Combined, Nextlink and Concentric will offer a one-stop source for communications services for small and medium-sized businesses, including voice, data, Internet and application service provider (ASP) services, the company said.
Concentric Network's pending acquisition of United Kingdom-based Internet Technology Group Plc, expected to close in the first quarter, will give the combined company an established base in the European data marketplace. |
