- Cogent Communications Holdings, Inc (NASDAQ:CCOI) agreed to snap T-Mobile US, Inc’s (NASDAQ:TMUS) Wireline Business.
- The financial terms of the transaction remain undisclosed.
- T-Mobile expected to record a pre-tax charge of $1 billion in the third quarter of 2022 to cover the carrying value of the wireline business and liability for the contractual payments, Reuters reports.
- The Wireline Business offers the legacy Sprint U.S. long-haul network that eventually provides an owned network asset to replace Cogent’s current leased network.
- As part of the agreement, in addition to the fiber network and related assets and customers, Cogent will acquire certain liabilities associated with the business.
- Cogent will offer I.P. transit services to T-Mobile for 54 months following the closing date, and T-Mobile will pay Cogent $700 million for such services.
- Under the contract, $350 million will be due in equal payments over the first 12 months after closing, and $350 million will be due in equal payments over the remaining 42 months.
- The deal will go through a newly formed direct subsidiary of Cogent.
- Cogent held $349.8 million in cash and equivalents as of June 30.
- Recently, T-Mobile U.S. laid off workers in its network operations and engineering group.
- The layoffs are a part of a restructuring program that eliminated thousands of jobs since the company merged with Sprint two years ago.
- Price Action: TMUS shares traded higher by 1.09% at $143.45 in the premarket on the last check Wednesday.
Morgan Stanley Maintains Equal-Weight on American Equity Inv, Raises Price Target to $33
Morgan Stanley analyst Bob Huang maintains American Equity Inv (NYSE:AEL) with a Equal-Weight and raises the price target from $31 to $33.
