AboveNet Shares Popped: What You Need to Know
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What: Shares of Internet service provider AboveNet (NYS: ABVT) soared 13% today after peer Zayo Group said it would purchase it for $2.2 billion.
So what: The deal values AboveNet at $84 per share and represents a 13% premium to its closing price on Friday. Zayo Group is making the move to expand its high-bandwidth fiber network in the face of voracious demand for data-hungry services.
Now what: The deal isn't subject to financing and is expected to close by the middle of this year. "The combination of AboveNet's and Zayo's assets creates a dense fiber footprint throughout North America and Europe for a bandwidth hungry world," AboveNet CEO William LaPerch said. "This new company will be uniquely qualified to meet the expanding needs of enterprise and carrier customers." AboveNet has until April 17 to find a better offer, but with the shares now trading above Zayo's $84 offer, taking a bit off the table seems prudent.
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