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Bell Atlantic in fiber pact
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October 7, 1999: 9:10 a.m. ET
Carrier taking up to 19% stake in Metromedia Fiber for $1.7B
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NEW YORK (CNNfn) - Bell Atlantic Corp. agreed Thursday to pay about $1.7 billion for as much as 19 percent of Metromedia Fiber Network Inc. as part of a deal to get low-cost access to the company's fiber-optic network.
Bell Atlantic, one of the nation's biggest phone companies, said it will invest about $700 million for a 9.9 percent stake in Metromedia Fiber, buying new shares at $28 apiece. Bell Atlantic also will buy about $975 million in debt securities convertible into common stock at $34 a share, which could increase its stake to about 19 percent.
Also as part of the deal, Metromedia Fiber will provide Bell Atlantic with dark fiber infrastructure, a technology that permits the transmission of high-speed data, voice and video connections, boosting Bell Atlantic's data network. Metromedia will receive $550 million over a 20-year period for the fiber. Bell Atlantic already leases dark fiber from Metromedia Fiber in the New York area.
Metromedia Fiber will use the capital to build its dark-fiber network and enter new markets.
The deal is subject to regulatory approval.
Metromedia Fiber (MFNX) shares surged 3-7/16 to 31-1/4 Wednesday. Bell Atlantic (BEL) stock jumped 1-9/16 to 66-11/16.
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