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News
$Lumen Technologies (LUMN.US)$ Lumen Technologies launches sale of consumer fiber unit, sources say
Milana Vinn Thu, Dec 19, 2024, 3:28 PM 3 min read
By Milana Vinn
(Reuters) - Lumen Technologies has kicked off a process to sell its consumer fiber operations, as the telecommunications company looks to phase out its legacy mass markets business and reduce its sizable debt pile, according to people familiar with the matter.
The move to offload the fiber business, which provides high-speed internet services to residential customers, comes as Lumen is doubling down on the artificial intelligence boom to power its near-term growth, while grappling with a rapid decline in sales and profits from its legacy business.
Monroe, Louisiana-based Lumen is working with investment bankers at Goldman Sachs to gauge interest for the business from potential acquirers that include industry rivals, the sources said, requesting anonymity as the matter is confidential.
Lumen could also choose to sell a stake in the fiber unit or sign a joint-venture deal with a strategic partner, the sources said, adding that the talks are at an early stage and a deal is not guaranteed.
The company has been exploring options for the mass markets business, which houses the fiber operations, since earlier this year. At the Bank of America Leveraged Finance Conference earlier this month, Lumen Chief Financial Officer Chris Stansbury said the fiber business was "a great asset, but an asset that is probably better suited in somebody's hands that has a wireless offering."
Any deal would require Lumen to split up its fiber business, which also offers internet services to large enterprise customers, the sources said, adding that the company is not planning to sell the enterprise fiber operations. As of the end of September, Lumen operated 4.1 million fiber-enabled locations.
Depending on what parts of the consumer fiber unit Lumen chooses to sell and how a deal is structured, the transaction could be valued at $6 billion to $9 billion, the sources said.
Milana Vinn Thu, Dec 19, 2024, 3:28 PM 3 min read
By Milana Vinn
(Reuters) - Lumen Technologies has kicked off a process to sell its consumer fiber operations, as the telecommunications company looks to phase out its legacy mass markets business and reduce its sizable debt pile, according to people familiar with the matter.
The move to offload the fiber business, which provides high-speed internet services to residential customers, comes as Lumen is doubling down on the artificial intelligence boom to power its near-term growth, while grappling with a rapid decline in sales and profits from its legacy business.
Monroe, Louisiana-based Lumen is working with investment bankers at Goldman Sachs to gauge interest for the business from potential acquirers that include industry rivals, the sources said, requesting anonymity as the matter is confidential.
Lumen could also choose to sell a stake in the fiber unit or sign a joint-venture deal with a strategic partner, the sources said, adding that the talks are at an early stage and a deal is not guaranteed.
The company has been exploring options for the mass markets business, which houses the fiber operations, since earlier this year. At the Bank of America Leveraged Finance Conference earlier this month, Lumen Chief Financial Officer Chris Stansbury said the fiber business was "a great asset, but an asset that is probably better suited in somebody's hands that has a wireless offering."
Any deal would require Lumen to split up its fiber business, which also offers internet services to large enterprise customers, the sources said, adding that the company is not planning to sell the enterprise fiber operations. As of the end of September, Lumen operated 4.1 million fiber-enabled locations.
Depending on what parts of the consumer fiber unit Lumen chooses to sell and how a deal is structured, the transaction could be valued at $6 billion to $9 billion, the sources said.
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MonkeyGee : is that why is ran? is that good or bad news?![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
DazzlerAus : Will reduce debt and allow them to focus on their new business model articles around saying they could get as high as 7bn to 10bn for it
Trytosaveabit OP MonkeyGee : Yes that’s why it jumped up! Depends on who you are? Hehehe. It’s bad because they got to get rid of that part! But it should be good for shareholders eventually! By offloading they can use the money to pay off large debt and get out of part of their business that seems to be losing them a lot of money? That would make shareholders happy that they will be able to narrow their focus and hopefully build the remaining part of the business into something profitable! Hope my incoherent explanation makes at least a bit of sense? Hehehe
MonkeyGee Trytosaveabit OP : makes very good sense. selling the consumer division to reduce debt and focus on corporate business. I think that's very positive.
Trytosaveabit OP MonkeyGee : Yeaaa! I actually made sense! Hehehe! Seriously though! Yup I agree and think it’s overall a pretty good move.