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Technology Stocks : e.spire Communications (ESPI) -- Ignore unavailable to you. Want to Upgrade?

To: Joe Dancy who wrote (68)	3/11/1999 6:43:00 PM
From: Tradelite	Read Replies (1) \| Respond to of 471

Rumors Boost E.spire By Jerry Knight Thursday, March 11, 1999; Page E07 Takeover speculation has triggered a takeoff in the stock of E.spire Communications Inc., the Annapolis Junction, Md., company that provides phone, data and Internet service to businesses. In less than two weeks, buyout talk drove E.spire stock from less than $5 a share to more than $10. After peaking Monday, it dropped back to $9.87 1/2 yesterday when speculators decided to take their profits without waiting to see if the takeover reports are true. Qwest Communications International Inc., the Denver company that bought Washington-based LCI International Inc. last year, is the company most often mentioned as a likely acquirer of E.spire. "At this point, it's very speculative," said Frank Murphy, an analyst at Wheat First Union in Richmond. E.spire officials won't comment on the takeover speculation, but they don't dispute arguments that the company's fiber-optic network could be a valuable prize. Qwest isn't commenting on the rumors. Whether a takeover offer is imminent or not, Murphy said, E.spire is likely to be acquired by somebody, someday. "We have long said there is value in the network assets this company has put in the ground," Murphy said. Those assets include a fiber-optic system running from Northern Virginia up the Northeast corridor to New York and extensive connections to business customers in smaller cities in the Southeast. E.spire has been considered an underachiever because it is neither growing as fast nor controlling costs as well as other firms in the business of competing with local phone companies, he explained. As a result, E.spire stock was undervalued compared with competitors before it doubled and still is relatively inexpensive by industry standards. Murphy said a price in the $12-to-$13-a-share range "would be the minimum that the company could sell for in a takeover. More likely than not, the company would be looking for a higher value." Besides Qwest, other potential buyers could include major long-distance phone companies, such as MCI WorldCom Inc.; a regional phone company from another part of the country; a foreign firm seeking a foothold in the U.S. telecommunications industry; or a company that competes with local phone companies for business customers. Ultimately, E.spire needs to be acquired, Murphy said: "The end game in telecom is you can't be a small player and survive." © Copyright 1999 The Washington Post Company