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TW Telecom shares jump on report it may sell itself

Monday, 1 Oct 2012 | 12:36 AM ET

By Siddharth Cavale and Sayantani Ghosh

Oct 1 (Reuters) - Shares of TW Telecom Inc rose 5.4 percent to an 11-year high after DealReporter.com quoted sources as saying that the telecom company may be looking to sell itself.

The online M&A publication said CenturyLink Inc could be a possible suitor and that Evercore Partners was advising TW Telecom.

TW Telecom and Evercore declined comment. CenturyLink was not immediately available for comment.

However, a TW Telecom source noted that the company is in the middle of a $480 million bond offering and would be legally obliged to disclose any ongoing M&A discussions.

"No disclosure was made," the source said.

Shares of TW Telecom hit a high of $27.50 on Monday, valuing the company at $4.15 billion.

DealReporter, which did not mention a deal value, said TW Telecom and CenturyLink have had discussions for several weeks and could be near a deal.

CenturyLink Chief Financial Officer Stewart Ewing recently said the company had successfully integrated its Qwest Communications International acquisition and could be ready to look at buying other companies.

Ewing said the company may be interested in metropolitan fiber assets, an area where TW Telecom is strong.

"CenturyLink needs more last mile fiber connectivity outside of the Qwest region and TW Telecom has 75 markets where they have local fiber networks," said D.A. Davidson analyst Donna Jaegers, adding that a deal would make sense.

Jaegers, rated five star by Thomson Reuters StarMine for the accuracy of her earnings estimates on TW Telecom, said the company would want between $35 and $40 per share in a buyout, a 34 percent to 53 percent premium on Friday's close of $26.09.

TW Telecom's two largest shareholders -- Southeastern Asset Management Inc and Columbia Wanger Asset Management LLC -- declined to comment.

(Reporting by Siddharth Cavale and Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty)

((sayantani.ghosh@thomsonreuters.com)(within U.S. +1 646 223 8780, outside U.S. +91 80 4135 5800)(Reuters Messaging: sayantani.ghosh.reuters.com@reuters.net))

Keywords: TWTELECOM OFFER/CENTURYLINK

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