Nextlink paying $2.9 billion for Concentric


January 11, 2000|By BLOOMBERG NEWS

McLEAN, Va. -- Nextlink Communications Inc., a telephone company controlled by cellular pioneer Craig McCaw, said yesterday that it has agreed to buy Concentric Network Corp. for $2.9 billion in stock in order to add Internet services for business customers.

Nextlink will pay $45, or about 0.573 share, for each Concentric share, based on Friday's closing price.

Concentric would give Nextlink Internet access and Web-site management services to offer small and mid-size businesses. Selling electronic-commerce services may give Nextlink an edge over its competitors, the regional local-phone service companies, which are barred from offering long distance.

"Nextlink provides voice service, but can't provide data service needs of its small and medium-size customers," said John Hodulik, an analyst at PaineWebber Inc., who has a "buy" rating on Nextlink and a "hold" on Concentric.

McLean, Va.-based Nextlink, which was 58 percent owned by McCaw as of Nov. 30, gets about 80 percent of its revenue by selling local and long-distance service and data. It operates in New York, Los Angeles, Dallas and other cities in 19 states.

Nextlink's shares, which have more than quadrupled in the past year, fell $1.4375 to $77.0625 yesterday on the Nasdaq stock market.

Concentric rose $9.625 to $39.825. The San Jose, Calif.-based company's shares have more than doubled in the past year.

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