- CenturyLink (CTL -1.4%) is giving back some of yesterday's merger-chatter gains, but Level 3 Communications (NASDAQ:LVLT) is adding on, up another 3.9% today.
- Level 3 jumped 10.6% yesterday, and CenturyLink rose 10%, on a report that the two were in advanced talks to merge.
- Level 3's at $53.90 today (after closing at $46.92 on Wednesday), and it's looking for at least $60/share in a buyout and $65 "could be reasonable," says Raymond James, which cut CenturyLink to Market Perform from Outperform -- thinking that stock could trade sideways for the months it could take to close such a deal.
- UBS sees the deal cresting $1B in synergies, given the companies' overlapping infrastructure. Analyst Batya Levi is assuming an all-stock deal at 9-11 times EBITDA and has CenturyLink at a Buy with a $36 price target (implying 18% upside).
- Oppenheimer's Timothy Horan, meanwhile, sees more of a 50/50 cash/stock split at a $60 valuation for LVLT. He's got CTL at Market Perform but boosts LVLT to Outperform at that $60 target.
- Among peers (and other potential targets) today: CCOI -1.2%, INXN +2%, GTT flat, ZAYO +1.9%, AKAM +0.9%, FTR -2.4%.