As you may have noticed by now, a lot of fiber appears to be on the market, with AboveNet, Sidera, Fiberlight, and others rumored. But prices are high and some of the historically more active buyers aren’t looking that eager. Notably, in the past week or two both PAETEC and Level 3 have indicated they aren’t likely to be out there bidding. Here’s a quote from PAETEC’s CEO Arunas Chesonis from the company’s recent investor day:
We’re kinda done for a while. We just want to consolidate, integrate, and take advantage of that physical infrastructure. Will we look at other companies? Absolutely. But it has to be a compelling story for us to do something like that.
And here’s a quick exchange from yesterday’s Level 3 presentation at the Cowen conference:
Sunit Patel: … I think that at this point in time we are just focused on getting the Global Crossing transaction done.
Colby Synesael: … It sounds like it’s not even an option that you are even willing to consider right now… For us to see you come out there a month from now and announce some big fiber transaction would be surprising?
Sunit Patel: I think that’s fair, yes.
And to add to the mix, here’s what Cogent’s Dave Schaeffer told me earlier this Spring:
We reviewed a lot of the transactions in the market and the prices that the sellers were looking for, and we concluded that we were not going to participate, as our prices were far lower than what the sellers were expecting to get. That could change in the future, but for right now I think it’s fair to say we’ve been priced out of the market.
As prices have only gone up, I doubt his stance has changed much.
That still leaves some buyers in the market of course. Private equity is always out there. CenturyLink could do it if they wanted to. Earthlink surely isn’t done yet. Zayo is, well, still Zayo. And tw telecom has been way too quiet for way too long.
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