Report: Windstream could face bidding war for PAETEC

Windstream's (Nasdaq: WIN) desire to complete its pending acquisition of PAETEC, a deal that will instantly double its business service holdings, may now face a competing offer from Level 3 Communications (Nasdaq: LVLT).

Late last week, PAETEC's shares were up 11 cents, or 2.1 percent, at $5.25 following a research note issued by David Dixon, an FBR Capital Markets analyst who intimated that the CLEC may get a better offer from Level 3.

Although it just completed its acquisition of Global Crossing last week, Dixon argues that a deal made by Level 3 would make "greater strategic sense." Dixon thinks that the service provider would be willing to pay about $7.30 per share.

In August, Windstream pledged $2.3 billion, or 0.46 of its own shares for each PAETEC share. PAETEC's board plans to vote on the Windstream deal at the end of October.  

News of a competing bid should not be that surprising. A number of shareholders believe that PAETEC's shares are worth at least $7 and have asked Boston-based Kyros & Pressly LLP and San Diego-based Robbins Umeda LLP to investigate whether or not PAETEC's board is getting the right price for the CLEC.

For more:
- CNBC has this article

Related articles:
PAETEC bond holders won't require Windstream to conduct early buyout
PAETEC's Windstream deal faces shareholder scrutiny
PAETEC shareholders to vote on Windstream merger in late October
Windstream continues M&A roll with $2.3B PAETEC acquisition
Windstream's $2.3B PAETEC buy enhances its business service foothold

Suggested Articles

In order to help fuel its fiber ambitions in the Midwest, Everstream announced it has secured $342.5 million in debt financing from nine banks.

The winds of changes swept through IBM on Monday as the company named Howard Boville as the new head of its cloud business.

As Frontier Communications charts a course to a bankruptcy filing next week, the company regrets not spending more on fiber network upgrades.