Crown Castle Acquires Global Signal

Elena
06 Oct, 2006
New York City

Under the terms of deal, Crown Castle, owner and operator of wireless infrastructure, will assume estimated debt of $1.8 billion, and the total cash consideration will be capped at $550 million. The transaction brings together two tower companies with more than 24,000 wireless sites between them.

[R]8:15AM Crown Castle agreed to acquire Global Signal for $5.8 billion[/R]
Crown Castle International ((CCI)) agreed to acquire Global Signal Inc. ((GSL)) for $5.8 billion in stock and cash. Under the terms of deal, Crown Castle, owner and operator of wireless infrastructure, will assume estimated debt of $1.8 billion, and the total cash consideration will be capped at $550 million. According to the agreement, Global Signal stockholders are entitled to convert each of their shares into 1.61 Crown Castle shares or they can choose to receive the amount of $55.95 per Global Signal share in cash. The transaction, which brings together two tower companies with more than 24,000 wireless sites between them, will enable Crown Castle to expand its business footprint. Global Signal''s three largest stockholders agreed to vote shares representing about 40% of Global Signal''s outstanding shares in favor of the transaction


[R]7:30AM Japanese stocks edged lower on Friday on profit-taking.[/R]
Asian markets closed mixed. The Nikkei 225 Average closed 0.08% lower at 16436.06. Tech names were lower after a three-week winning streak, as Canon fell 1.2%. Nippon Steel advanced 1.2% as news that Tata Steel was considering a $10 billion bid for Corus Group gave a boost to prospects of more consolidation in the steel sector and lifted steel shares higher. Inpex Holdings added 1.8%, despite worries it may lose part of its stake in Azadegan in Iran oil field. Large financial stocks were notable advancers, as Mizuho Financial Group gained 2% while Nomura Holdings rose 3.3%.

The Hang Seng Index in Hong Kong slipped 0.02% to close at 17903.39. New World Development, which gained 2.6%, was one of the biggest blue-chip advancers. China-related firms fell following big rises recently. China Mobile fell 1.2% after hitting an all-time closing high Wednesday.

Australia S&P/ASX 200 closed 0.03% higher at 5220.70. Minara Resources surged 5.8% after reporting record nickel production for the third quarter. Queensland Gas jumped 4% on hopes of counter offers to the bid launched Thursday by Santos.


[R]6:30AM Airline gains counter telecom sector weakness in Europe.[/R]
European markets were slightly higher by mid-morning on Friday. The FTSE 100 in London reached 6,006.6, Frankfurt Xetra Dax was up 0.1% at 6,083.12, and the CAC 40 in Paris was fractionally higher at 5,289.52.

M&A

Ryanair late on Thursday launched a surprise bid for Aer Lingus, valuing the company at 1.48 billion euros. The board of Aer Lingus rejected the offer saying it undervalued the long-term growth potential of the company.

Advancers

Shares in Ryanair added 1.5%, while Aer Lingus gained 1.7%. EasyJet''s shares rose 2.2% after lifting its profit forecast following a September passenger traffic rise of 9.8%.

European banks enjoyed another session of M&A rumour-driven gains as Banesto in Spain jumped 6.4% on talk of a bid from domestic rival Santander.

Decliners

Mobile and fixed-line telecom stocks were on the wane after Deutsche Bank made downgrades in each sector. Telecom Italia fell 1.1% after it was cut from buy to hold and had its target price lowered. Meanwhile, Vodafone, the UK mobile operator, fell 1.4% after Deutsche lowered its rating from buy to hold and its target price.

French aerospace group EADS is still struggling as it continued to emerge as Rolls Royce, supplier of engines for the ill-fated Airbus A380, said it had suspended work on the project for 12 months. Although Rolls said the suspension would not affect its financial guidance for the year, the shares fell 1.1%, while EADS slid 3.1%.

Oil and gold

U.S. crude oil fell 22 cents to $59.81 a barrel by mid-morning inEurope, after dipping to a low of $59.60 in early trade. London Brent fell 20 cents to $59.80. Gold opened Friday at a bid price of $570.50 a troy ounce, up from $568.55 late Thursday.

Currencies

The euro slipped against the U.S. dollar Friday ahead of new jobs data from the United States. The euro bought $1.2680 in morning European trading, slightly below its level of $1.2690 in New York late Thursday. The British pound dropped to $1.8744 from $1.8786. The dollar rose to 118.07 Japanese yen from 117.61 yen