Summary:

Well its not as big as the Dodgers-Diamondbacks-Yankees three way deal for the Big Unit. But it is still a big enough deal for me to notice. ITC^DeltaCom, has called off its deal with Florida Digital Network and Network Telephone Company. The deal was announced on […]

Well its not as big as the Dodgers-Diamondbacks-Yankees three way deal for the Big Unit. But it is still a big enough deal for me to notice. ITC^DeltaCom, has called off its deal with Florida Digital Network and Network Telephone Company. The deal was announced on September 8, 2004. No termination fees are payable by either company, and each company will bear its own merger-related expenses.

“While we are disappointed that we are unable to move forward with the transaction, we believe this mutual termination is in the best interest of our shareholders, customers and employees,” said Larry Williams, ITC^DeltaCom Chairman and CEO. “We will continue to focus on the successful execution of our operating plan.”


Under that agreement, the completion of ITC^DeltaCom’s merger with FDN is a condition to ITC^DeltaCom’s obligation to complete its merger with Network Telephone. The prior completion of the FDN merger is also a requirement of the consent by ITC^DeltaCom’s lenders to ITC^DeltaCom’s merger with Network Telephone. Even that deal has been cancelled. This is really bad news for ITC which is still reeling from poor third quarter results that prompted a sharp sell off in the stock. SCANA Corp, the South Carolina Gas & Electric sold its of 3.6 million shares. The perception in the market is that ITC is no longer a stable company. BellSouth is pressing home that point with large customers. Research firm Current Ananlysis points out that had the deal gone through, ITC would have acquired 257,000 access lines, $200 million in annual revenue, and $25 million in cash. It would have bought the company time to dig out of the telecom hole most CLECs find themselves in these days following the telecom meltdown.

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