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Macquarie: Fewer candidates for data-center buys

Nov. 23, 2015 8:34 PM ETLumen Technologies, Inc. (LUMN) StockT, VZ, LUMN, DLR, EQIX, DFT, CONEBy: Jason Aycock, SA News Editor3 Comments
  • Data center operators probably aren't in a buying mood for facilities that might be for sale -- particularly CenturyLink's, Macquarie suggests in a new report -- but private-equity firms could come in with bids.
  • CenturyLink (NYSE:CTL), the nation's third-largest local phone company, plans to sell 59 centers worldwide, and while Macquarie had thought Digital Realty Trust (NYSE:DLR) would get involved, analyst Kevin Smithen has changed his view after attending an industry trade show.
  • He now doubts that a buyer will come from among Digital Realty, DuPont Fabros (NYSE:DFT), Equinix (NASDAQ:EQIX), CyrusOne (NASDAQ:CONE), CoreSite or QTS Realty, with a limited "pool of logical and capable buyers" for assets from CenturyLink, or from Verizon (NYSE:VZ) or AT&T (NYSE:T). But near term, "private equity seems like the most likely acquirer of assets this size."
  • While CenturyLink assets are for sale, Verizon CFO Fran Shammo tried to shut down "speculative" reports that the company would pursue $10B in asset sales.

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