John Zhang • 38 Comments
John Zhang • 31 Comments
Wed, Nov. 9, 11:34 AM
- While Time Warner is trading lower as investors digest a slimmer chance of a buyout by AT&T under a Trump administration, Sprint (NYSE:S) -- a company long thought to again become a merger prospect after a change in the White House -- is up 12.5% and hitting two-year highs today.
- Its oft-discussed merger matchup partner, T-Mobile (NASDAQ:TMUS) is up 3.8%.
- Meanwhile, changes are likely coming to the FCC, Wells Fargo argues: It will at least be more conservative, if not working under new leadership soon; expecting Chairman Tom Wheeler to stay a full term is "no longer realistic."
- "If the rhetoric of those surrounding Trump’s campaign rings true, we can expect a Republican FCC to make a big push to roll back some of the regulations put in place under President Obama such as the Title II/Net Neutrality rules," writes analyst Jennifer Fritzsche. "There may also be a push to roll back some or all of what the FCC just did on privacy."
- "It’s unclear whether Chairman Wheeler will be able to act on the open items related to Business Data Services or set top box reform before he departs and if he does not, some suggest a Republican FCC will reverse course on these two items. There is also a big question on how a Trump FCC will view transactions including the recently announced T/TWX merger and the LVLT/CTL transaction."
- LVLT +0.4%; CTL +0.5%. TWX -1%. Names tied to net neutrality: T, VZ, CMCSA, CHTR, OTCPK:ATCEY, CTL, FTR, CCOI, DISH.
Fri, Oct. 28, 1:40 PM
- 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%.
Fri, Apr. 1, 12:30 PM
- Verizon (VZ -0.7%) and Frontier Communications (FTR -2.2%) say they've closed on the $10.5B sale of Verizon's local wireline assets in California, Florida and Texas to Frontier.
- The operations include broadband, video, voice and FiOS operations in those states, but not Enterprise business or any Verizon Wireless operations.
- That covers about 3.3M voice connections, 2.1M broadband connections, and 1.2M FiOS video subs along with the local ILEC businesses.
- Frontier is taking on 9,400 employees from Verizon in the process, and Verizon will use proceeds to pay down debt (it had launched the process after bidding $10.4B in the AWS-3 FCC spectrum auction in early 2015).
- Now read Verizon Looks Too Frothy And Writing Calls May Be Best Way To Make Income »
Dec. 3, 2015, 3:31 PM
- Frontier Communications (FTR -0.5%) has won its approval from the California Public Utilities Commission for its $10.5B acquisition of Verizon's (VZ -1.3%) wireline operations in the state.
- It had gotten a favorable signal from the PUC early last month. Frontier has received the other approvals for its takeover of the operations, which include telephony, broadband and video considering the included FiOS network.
- CEO Daniel McCarthy said the company was looking forward to the finish, now expected by the end of March: "We will transition our revenue to a more diversified mix, improve our growth prospects, create sustainable value for our shareholders and provide a great experience for our new Frontier customers in California, Florida and Texas."
- Previously: Frontier Communications +2.4% as California wireline purchase moves ahead (Nov. 09 2015)
Nov. 9, 2015, 12:12 PM
- Frontier Communications (NASDAQ:FTR) is up 2.4% after a morning's trading, following news that it got a favorable "proposed decision" from a judge with the California Public Utilities Commission over its planned acquisition of Verizon's wireline operations.
- Frontier's already received the other approvals for its takeover, which includes telephony, broadband and video considering the included FiOS network.
- The company will file comments on the move by Nov. 20; California's PUC is expected to vote in full by the end of the year and Frontier hopes to close the deal by the end of Q1 2016.
- Previously: Verizon confirms sale of wireline assets for $10B to Frontier (Feb. 05 2015)
Sep. 9, 2015, 9:57 AM
- Ending a mini-drought for junk debt, Frontier Communications (FTR +0.9%) will raise $6.6B in junk bonds to help finance its purchase of Verizon wireline assets, in the second-largest deal after Valeant Pharmaceuticals' $10B sale this spring.
- The deal may come in three parts and wrap up by this time next week, Bloomberg reports.
- In February, the company signaled it would hit the junk market for up to $7.9B in proceeds, weighted to unsecured notes, to fund the $10.5B commitment.
- Frontier still expects to close its deal for the assets in Q1 2016. The FCC approved the purchase last week, leaving public utility commissions in California and Texas the key remaining hurdles.
- Previously: FCC approves Frontier's $10.5B purchase of Verizon wirelines (Sep. 02 2015)
Sep. 2, 2015, 6:05 PM
- The FCC has approved Frontier Communications' (FTR +3%) $10.54B purchase of wireline operations in California, Florida and Texas from Verizon (VZ +1.1%).
- The deal, which Verizon undertook in the wake of its $10.4B in bids in the AWS-3 wireless spectrum auction, had previously received approval from the Dept. of Justice.
- It still needs approval from public utilities commissions in California and Texas, though the key hurdles are behind it. The companies expect to close the transaction at the end of Q1 2016.
- Frontier focused on the broadband offerings it could bring: "By doubling our size, we will add scale and scope to our operations, strengthen our product and service offerings, and improve the customer experience," said Frontier CEO Daniel McCarthy. "Our goal is to deliver the life-changing benefits of broadband to an additional 750,000 households at speeds of 25Mbps/2-3Mbps across the entire Frontier multi-state footprint, including California, Florida and Texas, by the end of 2020."
May 21, 2015, 6:04 PM
- Giving some key hope to suitors for Time Warner Cable not named Comcast (NASDAQ:CMCSA), FCC Chairman Tom Wheeler placed individual calls to various cable execs -- including TWC's Rob Marcus and Charter's Tom Rutledge -- to say the agency's not against any and all deals just because it kiboshed Comcast's, The Wall Street Journal is reporting.
- Wheeler reportedly wanted to clarify the FCC stance amid industry confusion about just how much consolidation it would support, and said that each potential deal would be judged on its merits.
- Wheeler did express that he's like to see more competition from companies that traditionally haven't battled in the same geographies, and encouraged the prospect of cablecos "overbuilding" into each other's service areas, according to the WSJ.
- With TWC looking like the key catch, its stock has risen 8.9% over the past month.
- Consolidation prospects: TWC, CHTR, OTC:ATCEY, CVC, CTL, FTR, WIN, FRP, CBB
Oct. 24, 2014, 11:02 AM
- Frontier's (FTR -0.7%) $2B purchase of AT&T's Connecticut wireline assets has officially closed. Connecticut's AG had signed off on the deal in August.
- The purchase gives Frontier 875K voice, 415K data, and 215K video connections, and 2.5K employees. Frontier respectively had 1.93M and 393K broadband and video subs, and 13.9K employees, at the end of Q2.
- Frontier has promised to invest $63M over the next three years to expand U-verse service coverage and increase broadband speeds in the state. The telco predicts it will "realize significant cost savings from leveraging its current infrastructure in supporting the new Connecticut business operations."
Aug. 12, 2014, 6:44 PM
- The Connecticut Attorney General has signed off on Frontier's (NASDAQ:FTR) $2B purchase of AT&T's wireline assets in the state, following a series of commitments.
- Among other things, Frontier has promised not to hike "the basic primary residential rate in effect for transferred [local] exchanges" for 36 months, and to offer its basic and standalone broadband services at or below current prices.
- Frontier is also committing to $63M in broadband-related capital investments within Connecticut from 2015-2017.
- Connecticut's public utilities regulator still has to sign off. Frontier originally planned for the acquisition to close during 2H14.
Jul. 29, 2014, 12:14 PM
- "I’m skeptical it can be replicated," says Elevation LLC's Stephen Sweeney about Windstream's (WIN +12.9%) REIT spinoff plans. "It’s very unclear if other large cap companies can have their companies viewed by the IRS as real estate."
- UBS also has its doubts: It thinks AT&T (T +3.3%) and Verizon (VZ +1.8%) would have to open up their networks to rivals if they were spun off into REITs, something it doesn't think the carriers will be keen on doing.
- Oppenheimer's Tim Horan is more positive, albeit while cautioning Windstream's spinoff isn't a done deal. "If successful with this restructuring, and there are obviously high regulatory barriers, this will be a game changer for the valuation of non-REIT infrastructure stocks in our industry.”
- AT&T, Verizon, Windstream, Frontier (FTR +11.7%), and CenturyLink (CTL +4.2%) have pared their morning gains a bit amid volatile trading on very heavy volumes. AT&T has seen 66M shares trade vs. a daily average of 19.3M; Frontier has seen 89M trade vs. an average of 6.9M.
- Enthusiasm about Windstream's spinoff stems not only from the tax benefits provided to REITs - American Tower's tax expense has been halved since it converted into a REIT in 2012 - but also from the potential for spinoffs to spark new M&A activity.
- Windstream CFO Tony Thomas: "The REIT is going to be uniquely positioned to be in a great spot to help unlock value at other companies ... We have a good understanding of how the REIT opportunity could work in the telecom landscape."
- Earlier: Telcos soar following Windstream's REIT announcement
Dec. 17, 2013, 7:38 AM
- Frontier Communications (NASDAQ:FTR) buys AT&T's (NYSE:T) wireline residential and business service that serves Connecticut for $2B in cash and related assets.
- The company expects the transaction to be accretive in the first year following the closing which is targeted for the second half of 2014 following regulatory approvals.
- FTR +13.8% premarket.
Apr. 2, 2013, 2:32 PM
Verizon Wireless (VZ, VOD) has purchased Frontier (FTR) and Rio Virgin Telephone's ownership stakes in Mohave Wireless, a rural 3G carrier operating in Arizona. Verizon, whose 4G LTE network covers nearly 89% of the U.S. population, says it will upgrade Mohave's network to 4G, now that it fully owns the carrier. Terms of the deal haven't been disclosed.| Apr. 2, 2013, 2:32 PM | 2 Comments