Operator

CenturyTel buys Embarq in all-shares deal

US rural telephone operator CenturyTel has agreed to take over fellow local operator Embarq in an all-stock deal valued at 5.8 billion dollars, the two companies announced Monday.

CenturyTel will exchange 1.37 of its own shares for each Embarq share, valuing Embarq shares at 40.42 dollars a share -- a premium of about 36 percent over Friday's closing price -- but just 11 percent over the average Embarq closing share price of the past 30 days.

Established in 2006 when merging Sprint and Nextel spun off their local telecoms operations, Embarq also brings to the smaller CenturyTel a debt load of 5.6 billion dollars, raising the total cost of the deal to CenturyTel to 11.6 billion dollars.

When the deal is completed, expected in the second quarter of 2009, the company will be present in 33 US states with about eight million phone lines and two million Internet customers, and have a projected annual gross income of 4.2 billion dollars.

In early trading Monday Embarq shares were up 7.5 percent to 31.97, while CenturyTel had fallen about 11 percent to 26.25.

(Published by AFP - October 27, 2008)