Yesterday Zayo moved the Analyst Day it had planned for next Thursday onto the back burner. They have postponed the event ‘to allow time to explore’ strategic alternatives that may enhance shareholder value. The stock surged in response.
While we already knew that the company has been in the M&A cross-hairs, this was a fresh new data point that suggests a deal may indeed be near. The phrasing of the quote from Dan Caruso seems to hint at one likely result:
“Zayo’s purpose is to provide mission-critical bandwidth to the world’s most impactful companies. We accomplish this by executing a focused strategy centered on communications infrastructure. With our deep and expansive fiber networks in North America and Europe, we play a unique and compelling role at the core of our customers’ networks. Whether public or private, this will remain Zayo’s focus and we will continue to expand the depth and breadth of our fiber infrastructure.”
“Whether public or private” suggests the two main possibilities of deal or no deal, leaving less room for (but not ruling out a purchase by a strategic buyer. It has always seemed most likely to me that Zayo might simply like to be privately held again if the right opportunity were to come along.
While an earlier offer by a consortium led by Blackstone was apparently rejected, I don’t think anyone thought negotiations had concluded. So there isn’t really much news here, and they may simply have postponed the analyst day in recognition that the street isn’t looking for the kind of information they were planning to present anyway. But it does feel more likely that a deal is getting closer, doesn’t it?
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