Dow:
Nasdaq:
S&P 500:

10275.22 (+5.75)
2188.71 (+11.87)
1084.59 (+4.30)

Featured Articles
Recover from Losses
Learn how to use a simply stock options strategy to cut your breakeven in half and quickly recoup losses!

How to Recession-Proof
Learn where to invest your money to minimize damage from the impending U.S. recession.

Gauge Stock Momentum
Learn how to determine when your investments have begun to lose steam to sell out before the crowd!

Research Tools
SEC Filings Analysis
Executive Compensation

FiberNet Telecom Group, Inc. (FTGX) may face some opposition after a large shareholder brought up concerns in a letter to the board that appeared in a Schedule 13D filing wih the SEC.

FiberNet Telecom Group, Inc. (NASDAQ: FTGX) may face some opposition to its buyout bid after Carlson Capital, L.P. issued a letter to the board. The activist hedge fund, which owns a 10.1% stake in the company, believes that the standing $11.45 per share offer by Zayo Group, LLC does not fairly compensate the company’s shareholders.

Carlson Capital believes that the true value of FiberNet Telecom Group is in excess of $14.50 per share, with a unique set of assets and relationships with domestic and global carriers that are unparalleled for a company of its size. The hedge fund believes that the company’s core services are highly attractive within a rapidly growing industry.

Over the past two years, FiberNet Telecom has generated revenue growth rates comparable to its peers with a 60% lower level of capital intensity. It is this aspect of its business that the hedge fund believes is not captured in a simple EBITDA multiple, and any comparative valuation analysis should factor in this important dynamic.

In the end, while the proposed deal price is close to FiberNet Telecom’s 52-week high, the hedge fund doesn’t believe that the price reflects the true equity value of the company. As a result, the hedge fund insisted that the company use this go-shop period to actively solicit competing offers. Shareholders appear to agree as well, with shares trading above the proposed buyout levels.

Add to: del.icio.us | Digg