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Windstream wrestles with Paetec share prices during Acquisition efforts October 20, 2011

Posted by TelUS Consulting Services in CLEC catagory.
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Shares of Paetec Holding Corp., a CLEC that provides telecommunications services to businesses, climbed Thursday above the value of the shares Windstream Corp. is offering for the company, indicating that investors are expecting a higher offer.

In a research note, FBR Capital Markets analysts indicated a higher bid for Paetec from  Level 3 Communications Inc. could be forthcoming. Analysts believe  a Level 3 acquisition would make greater strategic sense for Paetec.  Analysts estimate that Level 3 could offer as much as $7.30 per share.

The value of Fairport, N.Y.-based Paetec’s shares has closely tracked those of  Windstream since it announced its agreement with Paetec on Aug. 1. It’s offering shares worth about $820 million for the company. Paetec shares were up 11 cents, or 2.1 percent, at $5.25 in morning trading. Little Rock, Ark.-based Windstream is offering 0.46 of its own shares for each Paetec share, an offer that was worth $5.16 per share on Thursday morning.

As a history note, Windstream was formed in 2006 thru the spinoff of Alltel Corporation’s landline business and merger with VALOR Communications Group.

Windstream began its acquisition binge in 2007 with the acquisition of CT Communications, Inc. Since that time they have acquired D&E Communications (NASDAQ: DECC), based in Ephrata, Pa., Lexcom, Inc., based in Lexington, N.C., NuVox, Inc., a privately held competitive local exchange carrier based in Greenville, S.C., Iowa Telecommunications Services, Inc. (NYSE: IWA), based in Newton, Iowa, Q-Comm Corporation (Q-Comm, aka: KDL & Norlight), a privately held regional fiber transport and competitive local exchange carrier based in Overland Park, Kan., Hosted Solutions Acquisition, LLC (Hosted Solutions).

Quite an interesting group of acquisitions for the old independent telephone company from Arkansas.

Joe Buck, NCE

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