Hi gang,
As for any rumors might they be valid, I got this over at the winstar board.
[Qwest Among Rumored Suitors For Fiber-Optic Carrier e.spire]
NEW YORK -(Dow Jones)- Continuing a recent surge that analysts said has been fueled by takeover rumors,
local phone-service provider e.spire Communications Inc. stock leapt 22% Monday in furious trading.
After a 15% gain Friday, shares of e.spire (ESPI) rose $1.813 to close at $10.063 after six million shares
changed hands, compared with average daily Nasdaq volume of 835,400. The Annapolis Junction, Md.-based
firm provides local phone service over more than 30 fiber-optic networks in southern states.
Shares of Qwest Communications International Inc. (QWST), the most frequently mentioned possible suitor to
e.spire, hit a 52-week high, bucking the usual tendency for a would-be acquirer's stock to fall, particularly if the
deal is expected to be dilutive.
Qwest rose as high as $66.563 Monday, past the previous year high of $64.438 set Feb. 4. It ended the day up
$5.125, or 8.4%, at $66.50 on Nasdaq volume of 3.9 million, versus a daily average of 3.5 million.
The Denver long-distance company has said it wants to extend its local reach. It already has a relationship with
e.spire, from which it bought phone-network capacity around Washington, D.C., said a Qwest spokesman, who
declined to comment about the merger rumor.
An e.spire official wasn't immediately available for comment.
Among the other companies that might be interested in buying e.spire are MCI WorldCom Inc.
(WCOM), Teligent Inc. (TGNT) and Nextlink Communications Inc. (NXLK), analysts said.
"There are persistent rumors that the company is subject to a takeout offer," said PaineWebber Inc. analyst John
Hodulik. "I think there are a lot of potential buyers for these properties."
e.spire's shares have been under pressure, dropping from a 52-week high of $23.375 on July 8 to a year low of
$4.313 on Jan. 26.
The company has suffered from a perception that it was "long on network but short on management," said BT
Alex. Brown Inc. analyst Kevin Moore.
The company's relatively weak stock performance makes it vulnerable to a takeover offer and appealingly cheap,
said analysts. They said recent deals have valued comparable companies at three to five times the book value of
their networks and equipment. e.spire closed Monday at around 2.2 times that value, meaning it could fetch a
takeover price of $15 or more if recent trends apply, analysts said.
Regards,
Alvin Rakowski |
