PAETEC bond holders won't require Windstream to conduct early buyout

PAETEC (Nasdaq: PAET) cleared another hurdle in its move to be acquired by Windstream (Nasdaq: WIN) as the majority of the CLEC's bondholders said they will not require Windstream to conduct an early buyout.

If the bondholders elected to have Windstream do the early buyout, the ILEC would have paid current bond holders a lower price for what the bonds are actually worth. Due in 2015, 2017 and 2018, the notes have interest rates of 9.5 percent, 8.875 percent and 9.875 percent.

With this vote in hand, Windstream will take over $1.4 billion of PAETEC debt when it completes its $891 million stock acquisition of PAETEC.

Windstream's deal to acquire PAETEC is part of a broader strategy set by its CEO and President Jeff Gardner to expand its "focus on business and broadband services." Of course, PAETEC is only one stool in building its business and broadband vision as it follows previous acquisitions of the former NuVox and Q-Comm.

A number of financial and telecom analysts, however, believe that Windstream's ongoing M&A drive won't end with PAETEC.

In addition to making another deal to expand into the West Coast, David Tawil, co-founder and portfolio manager at Maglan Capital said in a recent research note that Windstream could be a frontrunner to acquire FairPoint Communications. If Windstream did purchase FairPoint (Nasdaq: FRP) they would gain an instant presence in the New England region, including an expanded business presence via VantagePoint IP-based network that's used to deliver Ethernet and videoconferencing services.

For more:
- Channel Partners has this article

Related articles:
Windstream's $2.3B PAETEC buy enhances its business service foothold
Windstream continues M&A roll with $2.3B PAETEC acquisition
PAETEC's Windstream deal faces shareholder scrutiny

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