Zayo Group Holdings Inc (NYSE: ZAYO) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that it would soon be taken private at a premium, exciting investors and sending the stock for the top. Today, we’ll talk about:
- The going private announcement;
- what we’re seeing from ZAYO stock as a result; and
- what we’ll be watching for ahead.
ZAYO Announces Going Private Transaction
As mentioned above, Zayo Group is having a strong start to the trading session this morning after agreeing to be taken private. The announcement came by way of press release in the premarket hours.
In the release, ZAYO said that it would be taken private at a price of $14.3 billion. The agreement was signed with private-equity firms Digital Colony and EQT. The two will pay $35 per share in cash for the company. This represents a premium of 14.3% over the company’s closing price on Tuesday.
It is expected that the transaction will come to a close in the first half of 2020. In a statement, Dan Caruso, CEO at ZAYO, had the following to offer:
Digital Colony and EQT share our vision that Zayo’s Fiber Fuels Global Innovation. Both are experienced global investors in the communications infrastructure space, and they appreciate our extraordinary fiber infrastructure assets, our highly talented team and our strong customer base. I am confident this partnership with EQT and Digital Colony will empower Zayo to accelerate its growth and strengthen its industry leadership.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. When it comes to Zayo Group, the news proved to be overwhelmingly positive.
After all, the take private transaction will offer investors a premium, creating immediate returns. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:09), ZAYO is trading at $33.14 per share after a gain of $2.52 per share or 8.23% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ZAYO. In particular, we’re interested in following the story surrounding the take private transaction as it will provide immediate value for investors. Nonetheless, we’ll keep a close eye on the story and bring th enews to you as it breaks!
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