- Google (GOOG -1.8%, GOOGL -1.6%) is an unlikely buyer for Zayo Group (NYSE:ZAYO), MoffettNathanson says in response to reports that the tech giant might be a player in new bidding for the network provider.
- ZAYO shares are up 3% in first regular-session action since the Bloomberg report Friday evening of new interest from the likes of Google and CenturyLink (CTL +0.7%).
- But Google would probably face regulatory issues in trying to buy Zayo, and in any case has been able to build its network by leasing rather than construction or acquisition, analyst Nick Del Deo says. CenturyLink would be a more logical partner but could also face regulatory concerns along with operational and financial issues. (h/t Bloomberg)
- Crown Castle (CCI +0.2%) would be the best strategic partner, though they're not indicating interest, and maybe the recent leaks are to "smoke Crown Castle out," Del Deo says.
- While chatter has a number of private-equity firms looking to get Zayo in the low $30s per share, Del Deo has a $30 price target with a Buy rating. Zayo's at $27.50 currently.
- Now read: CenturyLink: Wildly High Yield
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