CenturyTel's bid this week to acquire Embarq stunned just about everyone except the two companies involved. The surprise occurred mostly because it seemed like ongoing credit pressure and the overall poor economy would force rural telcos anxious to consolidate to at least wait until early next year and the promise of a healthier credit market. However, this week's match-up mostly avoided credit concerns because it is being proposed as an all-stock deal. The deal also was helped by the lack of "change of control" provisions regarding the buyer's existing debt.
CenturyTel's early move in some ways stole the thunder of Windstream Communications, which had been expected--and is still expected--to help ignite rural telco consolidation once the market conditions improve. There is not much of 2008 left, so perhaps it's now safe to say we won't see another significant rural telco merger before the year is done. Or will we?
- Telephony looks at ongoing rural M&A considerations
CenturyTel announced its Embarq deal this week
Windstream has long seemed ready for M&A