The Reuters news agency is reporting this morning that Sachem Head Capital Management, described as an activist hedge fund, has written to Caruso (pictured) “urging it to explore a sale”. Reuters cites “people familiar with the matter”, but does not name its sources.
The agency and the New York Post are both reporting that Zayo has turned down a bid from Blackstone Group, the private equity investor.
The reports say Blackstone and other members of a consortium offered $30 a share, compared with Zayo’s current price of $25.51. Zayo’s market cap at its current price is a shade under $6 billion, implying the Blackstone bid values it at just over $7 billion.
Capacity asked Zayo for a comment. A spokeswoman emailed: “Thanks for reaching out. We decline to comment.”
If the reports are accurate, Zayo’s valuation has dropped in four weeks, when Capacity reported that CTFM, a US website that follows bids and deals, was saying Zayo had turned down a bid for “more than $30 a share”. Zayo’s share price was then $25.70.
Reuters says that Blackstone’s partners in the consortium are Stonepeak, KKR, Charlesbank, GTCR, and I Squared Capital (ISQ), which owns HGC Global Communications.
The New York Post says that the consortium “made a binding offer” for the company “after conducting due diligence”, and confirms that this latest offer was lower than the non-binding offer in January.
In late January Nick Del Deo of MoffettNathanson said that “CenturyLink would be a more logical partner” than other potential bidders.
Zayo’s share price has dropped from $37.90 in late August 2018 and hit a low of $20.46 in late December before climbing again to $25 or so.
