AboveNet Finds $2.2B Buyer in Zayo Group

High-bandwidth provider AboveNet Inc. (NYSE: ABVT) has potentially found a $2.2 billion buyer in Zayo Group Inc. (NYSE: ZAYO)

AboveNet reportedly retained JPMorgan in May 2011 to help it find a buyer. Monday morning, the privately held fiber provider Zayo Group said it is offering a 21 percent premium over the average closing stock price for AboveNet over the past couple of months in a bid to buy the company.

Under the terms of the agreement, each share of AboveNet common stock issued and outstanding immediately prior to the transaction will be entitled to receive $84 per share in cash. As part of the proposed deal, GTCR, a Chicago-based private equity firm, will make an equity investment in Zayo.

AboveNet, which provides fiber services for operators and enterprises, could, however, still have other options. The agreement gives it a 30-day provision to enter into discussions about other offers.

AboveNet shares are up $9.92, or 13.36 percent, at $84.10 Monday morning.

Why this matters
AboveNet, which operates more than 2.3 million fiber miles linked to more than 2,600 buildings, would help the Zayo Group boost its bandwidth in the U.S. and Europe.

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