Cincinnati Bell Says Infrastructure Firm Tops Brookfield; Telecom Shares Gain
Cincinnati Bell got an offer Wednesday from an infrastructure fund that it didn't identify to buy it for $12 a share in cash, the telco said Friday. The stock rose above that offer price, indicating investors expect a richer deal.…
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Last month, the ILEC got a buy-out bid from Brookfield Infrastructure at $10.50 (see 1912230014). Cincinnati Bell said there are no assurances that discussions with the infrastructure fund will result in a binding proposal or that such a transaction would be approved, but discussions have begun. The Brookfield deal remains and Cincinnati Bell's board "reaffirms its existing recommendation in support of the transaction with Brookfield at this time." Wells Fargo's Jennifer Fritzsche said the recent bids "should shine the light on the value of the [rural LEC] space." The analyst favors RLECs and ILECs that "continue to invest more capital in fiber," such as Cincinnati Bell, Consolidated Communications and CenturyLink. Cincinnati Bell closed up 22 percent at $13.75, while Consolidated gained 17 percent to $5. Cincinnati Bell reports Q4 results Feb. 13 but won't have a call. A spokesperson declined additional comment.