Zayo ‘gets private equity bid’ valuing company at $8bn

16 January 2019 | Alan Burkitt-Gray

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Zayo has received a bid from an unnamed private equity investor valuing the company at $8 billion, according to US reports.

CTFM, a US website that follows bids and deals, says that the bid for Zayo was more than $30 a share, well above the current share price of $25.70.

The report says that the bid has been complicated by the volatility in the debt market.

Zayo shares reached almost $40 in July 2018, an all-time high since the company floated its shares in October 2014 on the New York Stock Exchange at $19 a share. But the price sank to just over $20 in late December 2018. Since then they have climbed another $5.

According to various US market monitors, CEO Dan Caruso (pictured) sold 265,866 shares in the company on 14 August for $10 million.

In Zayo’s first quarter, ending 30 September 2018, operating income increased by $3.9 million but net income decreased by $20.7 million over the previous quarter.

Caruso announced last year a plan to split the company into an infrastructure business, with about $1.7 billion of annual revenue, and a services business, with about $1 billion of revenue.

The whole company has assets of about $9.3 billion and debt of about $5.8 billion.

Zayo plans to hold its second-quarter earnings call on 7 February, when more details may become available.

Capacity asked Zayo in Colorado for a comment. “We decline to comment,” said an executive.