CenturyLink Buys Savvis Inc At A Discount

US phone company CenturyLink has offered to buy data center operator Savvis Inc. for $2.5 Billion today, a price that many analysts view as an undervalued bid for Savvis.

Analysts believe the CenturyLink Inc move makes good sense, as they look to join the cloud computing frenzy, as more and more consumers move away from home phones and into the internet and smartphone products and services.  CenturyLink finalized its $10 billion Qwest purchase earlier this month and now is going after Savvis in an effort to boost its data center presence.
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The deal involves paying $30 per share in cass to Savvis Inc. shareholders, as well as $10 in CenturyLink shares.  This implies a premium of of 11% over yesterdays closing price of Savvis stock.  The $2.5 Billion price values Savvis at only 10 times 2011 earnings.  Some analysts said today that this is a low offer, saying they would expect a fair price of $45 per share.  As with many deals these days, they expect shareholder lawsuits due to the low offer.

Savvis Inc shares were trading up around 9% this morning, while CenturyLink shares were down only slightly by half a percent.

CenturyLink to Acquire Savvis for $40 Per Share in Cash and Stock Transaction
Centre Daily Times, on Wed, 27 Apr 2011 09:16:39 -0700

Under the terms of the transaction, Savvis stockholders will receive $30 per share in cash and $10 in shares of CenturyLink common stock, subject to adjustment as described below. The consideration represents an 11% premium over Savvis‘ closing stock 

CenturyLink to buy Savvis for $2.5 billion
Long Island Press, on Wed, 27 Apr 2011 09:05:02 -0700

By AP on April 27th, 2011 NEW YORK (AP) — Phone company CenturyLink Inc. said Wednesday it agreed to buy Savvis Inc. for $2.5 billion in cash and stock, just days after it completed the acquisition of rival Qwest Communications International Inc. 

SAVVIS, Inc. (SVVS) Hits New 52-Week High at $39.35
American Banking News, on Wed, 27 Apr 2011 09:19:13 -0700

Shares of SAVVIS, Inc. (SVVS) hit a new 52-week high on Wednesday. The stock traded as high as $39.35 during mid-day trading and last traded at $39.27. The stock previously closed at $36.02. Separately, analysts at Stifel Nicolaus initiated coverage on