Apparently, the bids really were too low, because today q publicly announced that it has decided not to sell its longhaul network. They acknowledged there was an auction going on, but said that they did not get bids sufficiently high to make them want to do a deal. The price tag of $2-3B that was unofficially placed on the asset was just not realistic at the current time. Is it really worth that much to Qwest and not to Verizon or Level 3 or whomever? Who knows… All we can say is that this is a really bad time to sell stuff, and it was always rather odd that they would start this process now when they didn’t have to.
I have suggested several times that this auction was a trial balloon, a dry run for the real thing when more potential buyers might actually have the resources to make a bid. I continue to think that this is the case. Qwest longhaul may not be for sale now, but an array of potential buyers have now had a close look at the asset. They’ve kicked the tires and looked under the hood, and they won’t have to do as much inspection the next time. Qwest has also gauged the level of interest from each potential buyers, so they know who to talk to later on.
Of course, this sort of publicized ending of a sales process is kind of meaningless. If they got a bid tomorrow in the range they wanted, they’d reconsider. But it’s far more likely to be something we hear about next spring if the economy shows some life between now and then.
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Categories: ILECs, PTTs · Internet Backbones · Mergers and Acquisitions
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I don’t think Qwest was kidding.
Their Board made the right decision. Keep in mind there is fiduciary obligations a Board must adhere to including what to do with (valid/real) unsolicited interest(s). Someone made an effort that brought their attention to consider a process.
What this says, Qwest is healthy and has no need to have sold this asset. No fire sale, no bad reflection on Qwest. They fully disclosed if they received the price they valued the asset at, they would use proceeds to pare down debt. It is that simple.
We get unsolicited inquiries all the time … 95% we ignore or they drop when we push for something in writing. Some solicitors are dumpster diving, some think it’s 2002 and some are trying to get a free seminar.