RCN Drops FiberNet Bid
Broadband Firm Pursues Earlier Deal
Mike Farrell -- Multichannel News, 7/9/2009 3:57:38 PM
FiberNet Telecom Group said Thursday that RCN Corp. dropped its bid to acquire the New York-based provider of broadband connectivity services, paving the way for the company to pursue a deal with Zayo Group.
In a statement, Fibernet said that RCN withdrew its proposal to purchase FiberNet for $12.50 per share ($96 million) and that it would pursue an earlier offer of $11.45 per share from Louisville, Colo.-based Zayo. The value of the Zayo deal works out to be about $88 million.
Zayo had reached an agreement to purchase FiberNet in May, but the deal allowed FiberNet to accept better offers until June 17. RCN, according to Securities and Exchange Commission filings, sent a letter to FiberNet on June 16, making the $12.50 per share proposal and trumping the earlier Zayo deal. FiberNet did not say why the RCN deal fell through.
In a statement, FiberNet said it expected the Zayo transaction would be completed by the third quarter.
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