The US fixed line telco Covad Communications has signed a definitive agreement to be acquired by the international investment group Platinum Equity for USD1.02 per share in cash. The purchase price represents a 59% premium on Covad’s share price at the end of last week. The transaction has been unanimously approved by the Covad board but is still subject to the approval of its shareholders and the US telecoms regulator, the Federal Communications Commission (FCC).
Charles Hoffman, Covad’s president and chief executive officer, commented: ‘Platinum’s approach will bolster the successful execution of Covad’s business strategy while providing the resources and support necessary for sustained growth. We believe that the resulting increased market competitiveness, improved capital structure, and enhanced product and network capabilities best position our customers, partners, and employees for the future.’