On Monday, L3 Communications (LVLT) announced that it will acquire TW Telecom (TWTC) in a deal worth roughly $5.64 billion. In midday trading, TWTC stock surged more than 7%, while LVLT shares went in the opposite direction, sinking about 6%.
LVLT says it will pay $40.86 per TWTC share. That’s a 12% premium over the internet service provider’s Friday closing price. LVLT will pay for each TWTC share with $10 in cash and 0.7 LVLT shares, Reuters notes.
The merger is expected to be classed as a tax-free reorganization. LVLT anticipates spending $170 million to integrate the companies. The deal is expected to be completed in the fourth quarter.
LVLT indicated that it has raised $3 billion in financing for the acquisition of TWTC.
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