IP-based communications solutions provider Level 3 Communications has announced plans to offer US$600m of eight-year senior notes in a private placement to fund its US$5.7bn acquisition of TW Telecom.
Level 3 will place the proceeds from the issuance…
IP-based communications solutions provider Level 3 Communications has announced plans to offer US$600m of eight-year senior notes in a private placement to fund its US$5.7bn acquisition of TW Telecom.
Level 3 will place the proceeds from the issuance into an escrow account and, once the closing conditions of the TW acquisition are satisfied, will use the balance to part-finance the cash portion of the merger and to refinance TW’s US$1.6bn debt.
Level 3 said it had secured US$3bn in committed financing when it announced the TW deal in mid-June. The bond offering will reduce the outstanding bridge commitment it has in place with the lending banks.
Level 3 is offering TW shareholders US$10 in cash and 0.7 of Level 3 common stock for each of their shares in TW, which equates to US$40.86 per share – a 12.4% premium on TW’s last closing price of US$36.34.
There is no collar on the deal and Level 3 said TW Telecom shareholders will end up with approximately 29% of the combined business.
Level 3 expects the merger to close no later than January 2015.
The company owns networks and data centres in more than 60 countries and has significant global subsea networks. It provides local, national and global communications services to enterprise, government and carrier customers.
TW offers managed services, including business ethernet, converged and IP VPN solutions for enterprises throughout the US and across the globe.
