Stock Up as Zayo Eyes Alternatives; Financial Entity Called Likely Buyer
Zayo said it's "evaluating strategic alternatives" as it postponed a March 14 analyst day. There's no timetable or assurance of a deal, though Zayo expects to take at least "several weeks to months," it said Wednesday. Its stock closed up…
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13 percent at $27.48. “Zayo’s purpose is to provide mission-critical bandwidth to the world’s most impactful companies," using its fiber networks in North America and Europe, said CEO Dan Caruso. “Whether public or private, this will remain Zayo’s focus and we will continue to expand the depth and breadth of our fiber infrastructure.” The "private" mention is "especially interesting," wrote Wells Fargo analyst Jennifer Fritzsche. "We continue to believe the likely buyer of this asset is a financial one vs. a strategic one. While the press has mentioned in the past strategic interest from the likes of [CenturyLink] or Alphabet [(Google)] -- we see that as highly unlikely (we believe CTL would bring much anti-trust scrutiny). ... [T]here is a significant amount of private capital on the sidelines (both in terms of infrastructure and pension funds) wanting to put capital to work." Zayo declined further comment.