Shares of XO Holdings, which owns CLEC XO Communications, closed more than 3 percent higher the first trading day after activist investor Carl Icahn bought 17.5 million shares in the company.
Icahn paid more than $10 million for the stock and brought his total ownership to about 113.4 million shares, or 62 percent, up from about 53 percent. The move came about a year after XO which the Wall Street Journal dubbed as struggling” rejected Icahns offer to buy the rest of the XO shares he didnt own for 55 cents each. XO decried that proposal as substantially undervalued but did say it would consider a better one.
XO last month reported a narrower second-quarter loss of $1.2 million, compared to $6 million in losses a year earlier. Revenue fell, though, as XO increased prices on wholesale long-distance services.
The Journal is among outlets speculating that XO is ripe for takeover by a stronger operator. XOs infrastructure and wireless spectrum would make it a valuable asset for a big phone company,” the Journal wrote on Sept. 10. The telecom sector is consolidating, even in a weak economy; the latest example is that of PAETEC buying Cavalier Telephone, particularly for its fiber holdings.
XOs stock closed 3.23 percent higher on Monday, reaching 64 cents. The companys 52-week low stands at 46 cents and the high is 81 cents.
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May 22 2018 @ 16:40:08 UTC