ST Telemedia portfolio company Level 3 to merge with CenturyLink in S$47b deal

A trader passes by the post where Level 3 Communications is traded on the floor of the New York Stock Exchange.
A trader passes by the post where Level 3 Communications is traded on the floor of the New York Stock Exchange.PHOTO: REUTERS

SINGAPORE - Singapore Technologies Telemedia said on Tuesday (Nov 1) that one of the companies in its portfolio, US Internet service provider Level 3 Communications has agreed to a merger with telecom company CenturyLink.

US media announced on Monday that CenturyLink had agreed to buy Level 3 in a cash and stock deal valued at US$34 billion (S$47.29 billion), including debt.

STT Crossing, ST Telemedia's wholly owned subsidiary, holds about 18 per cent of Level 3's outstanding common stock. ST Telemedia said STT Crossing has entered into a voting agreement with CenturyLink to vote its Level 3 shares in favour of the transaction.

ST Telemedia said that under agreed terms, Level 3 shareholders will receive US$26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink's stock for each Level 3 share they own.

This implies a purchase price of US$66.50 per Level 3 share and a premium of approximately 42 per cent based on Level 3's unaffected closing share price of US$46.92 on Oct 26, which was the last trading day prior to market speculation about a potential transaction, ST Telemedia added in a filing with the Singapore Exchange.

Upon the closing of the transaction, CenturyLink shareholders will own approximately 51 per cent and Level 3 shareholders will own approximately 49 per cent of the combined company, US media said.