Analysts say Windstream ready to buy

When industry insiders are asked about the next company likely to enter the U.S. telecom industry's recent M&A fray, Arkansas-based Windstream Corp. seems to be the tip-of-the-tongue response.  The 2006 progeny of Alltel was restricted in the amount of stock it was allowed to issue following the spin off, but that restriction ended earlier this summer, leaving the RLEC in a good position to raise cash for a purchase -- or two.

Despite a less-than-profitable second quarter -- the company's take dipped 12 percent -- CEO Jeff Gardner has been upfront about it being time for the telco to make a buy to secure better market scale and positioning. But, so far, nothing has materialized.

Now, Stanford Group telecom analyst Michael Nelson says he expects the carrier to make a move. "I would expect them to begin to consolidate the industry, which is extremely fragmented," Nelson said. "Management has been quite vocal about the need and desire to consolidate the industry."

Rural local exchange carriers have been under-performing the market, which makes several of them likely targets.

For more:
- See the Red Orbit story [1]

Related articles:
Will Windstream get off the fence? Windstream report [2]
Windstream profits blown away in Q2. Windstream report [3]
Are RLECs in play for M&A? RLEC report [4]