Metromedia To Acquire AboveNet
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Metromedia Fiber Network Inc., which is building fiber optic networks in many of the nation's largest markets, Wednesday purchased business Internet provider AboveNet Communications Inc. in a stock deal worth almost $1.65 billion.
The deal, which has been approved by both companies boards of directors, will give AboveNet shareholders 1.175 shares of Metromedia Class A common stock. Given Metromedia's closing price of $42.50 on Tuesday, the price represents a 35 percent premium.
Both companies said the transaction will give businesses the ability to dramatically grow e-commerce and media applications through the use of AboveNet's global Internet network.
"By combining Metromedia Fiber Network's virtually unlimited, pure photonic fiber network with AboveNet's high-performance connectivity solutions, Internet traffic is able to flow more predictably, far more reliably and at far lower costs," said Howard Finkelstein, Metromedia's president.
The deal is expected to close in the third quarter.