Verizon Could Improve Competitive Position By Buying Savvis

Web-hosting and telecom services company Savvis (SVVS) would make a fine acquisition target for Verizon (VZ), Cowen’s Tom Watts speculated yesterday.

“We believe that enterprise-focused telecom carriers can increasingly benefit from offering managed hosting to enterprise customers, and Savvis is the best target in the market,” he says.

Watts then adds that he sees Verizon as the company’s most likely buyer. He says the Savvis suites of managed hosting services would improve Verizon’s competition position against AT&T (T) in the sector. Watts said that another logical buyer for Savvis would be Global Crossing (GLBC).

Watts thinks Verizon could acquire SVVS for $65 a share, or about a 30% premium.

Yesterday morning, Savvis was up 23 cents at $50.45. Verizon was up 9 cents at $40.75. Global Crossing was off 48 cents at $27.52.