EarthLink (ELNK -0.4%) receives a positive Barron'swrite-up. The paper touts EarthLink's low valuation (1.1x price-to-book) and 2.5% dividend yield, and notes recent acquisitions have helped it diversify beyond its declining dial-up ISP business, which now accounts for only 25% of revenue. In addition, EarthLink trades at a much lower valuation than the one Zayo Group is paying for AboveNet (ABVT).
AboveNet (ABVT) +13.5% premarket after agreeing to be bought by Zayo Group for ~$2.2B. Zayo will pay $84.00/share in cash for ABVT, a 13% premium over last Friday's closing price. As part of the deal, GTCR, a Chicago-based P-E firm, will make an equity investment in Zayo.
Shares of AboveNet (ABVT +5.5%) get a lift from Raymond James with an upgrade to Strong Buy from Outperform. The company looks to benefit from the cloud market indirectly with a new agreement with Amazon (AMZN +2.1%) allowing customers to circumvent the internet and connect directly to Amazon's data centers via its fiber optic network.
AboveNet (ABVT -4.5%) dipped today after another DealReporter story says private-equity interest in buying the company has stalled. The company retained JPMorgan in May to explore a sale, and since that time has seen its stock frequently whipsawed by buyout speculation.