A Binding Offer for AboveNet Rumored

June 15th, 2011 by · 13 Comments

The New York Post has an article as of early this morning quoting sources who say that AboveNet has indeed managed to attract a binding offer from a private equity group - the terms of which aren't yet known.  We know of course that there is an auction of sorts going on, so I wouldn't be at all surprised if this were the case - although it doesn't sound as if the fat lady has sung yet.   Last I heard, tw telecom and Zayo were still in the hunt as well.

As for the rest of the NY Post article, I'm a bit puzzled by the slant:

AboveNet, whose technology, according to some critics, is falling out of favor with the industry...

Hear that everyone?  Metro fiber is falling out of favor!  Copper must be back in vogue, time to run away!  Actually, I think it's more related to this quote:

"The biggest bottleneck for the future is in the data center and less and less about underlying fiber," a source said.

Well, there's no doubt that the data center space is hot too, but I'd like to see either one (metro fiber or colocation) get by without the other.  Both sectors are plenty hot right now - and metro fiber hasn't been this hot since the bubble burst.  Seems silly to put the two in the same race though, it's part of the same phenomenon.  But then, it is the Post.

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Categories: Mergers and Acquisitions · Metro fiber

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13 Comments So Far


  • en_ron_hubbard says:

    Rob,

    I would tend to trust the NYP when it comes to who Jennifer Aniston is dating, but trends in data technology… not so much.

  • Very bizzare article. What exactly is a “binding offer”?

    If the company couldn’t get $80, they really have no reason to sell. So rumors of them having a binding offer below their target price make no sense.

    • en_ron_hubbard says:

      Andrew,

      In this context a “binding offer” probably means an offer with no financing contingency and it may have come with a marked up P&S doc. The article didn’t say the offer was below $80, but that may be the case.

      The only way a PE buyer gets this is if industry players wimp out on price. I would think it gets 80+ esp if TWTC sees fit to pull the trigger.

  • Anon says:

    Maybe this story was planted to get someone to step up and make a compelling offer. $2B for a 400M/year in revenue company is pretty steep.

  • Anonymous says:

    You wonder if JPM can get a binding offer from PE in just a few weeks, what has taken them 3 months to help address XO.

    • en_ron_hubbard says:

      It took the special committee (and they are really special!!) three months to hire them, and it’s not even clear what their brief is. It would take them 30 seconds to opine that 70 cents is a joke. The real issue is whether they are doing a market check, and whether the prospect of a sale is credible enough to elicit serious interest from anyone.

  • Don't Trust Carl says:

    Anybody go to XO annual meeting? My flight got delayed and called to speak to Investor Relations and was told Laura Thomas would call back to address the questions I wanted answered at meeting. No call back…surprise, surprise. Carl (Icahn) must not have been available to tell her what to say. No mention of Carl’s offer in 8k, or status on CEO….what a Friggin’ Joke.

    • en_ron_hubbard says:

      The words “Investor Relations” really don’t apply to XO except juxtaposed to other words like “bad” or “non-existant”. It would be a joke except it’s true.

      No point going to annual meeting except to embarrass them– but they really don’t care. Meanwhile the litigation grinds on. Sad situation for a company that seems to be getting its act together from an ops standpoint. But the fish has a head.

      • Don't Trust Carl says:

        That is the thing, why is R2 agreeing to these monthly extensions?? Time to depose Crusty Carl and let the chips fall

  • Anonymous says:

    Anyone hear why this fizzled out? Did they run out of time prior to earnings release? Is the hire of the SVP of Sales any indication a sale is off the table for the moment?

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