level3Speculation of a possible Level 3 sale drove the stock price (NYSE: LVLT) of the network operator up by almost 4% yesterday, with three times the normal trading volume. An investor newsletter suggested that Level 3 is exploring strategic options, including a sale of the company.

Possible suitors include Comcast and Alphabet/Google. Level 3’s assets, including an extensive fiber network across continents and an established enterprise customer base could be appealing to both of those companies noted the Benzinga investor note.

Level 3 Sale Rumors
Comcast could gain considerable assets to take on the likes of AT&T, Verizon, and CenturyLink in its ongoing push into the enterprise business segment. Level 3’s considerable fiber network assets could be attractive to Alphabet/Google, who is growing their own broadband access and video business, not to mention their own global data networking and connectivity needs.

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Momentum for M&A activity within the fiber networking community has been quite active for some time now. There have been a fair number of smaller deals of fiber network operators. Windstream spinoff CS&L was recently formed for the purpose of assembling fiber network and other telecom network assets. Level 3 has been active as well, buying TW Telecom for $5 billion back in 2014.

A Level 3 sale is by no way imminent. Their strategic options include a stock buyback program, according to the investor letter.

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