Teleglobe Inc. agreed Monday to buy Excel Communications Inc., which sells phone services door-to-door, for $3.6 billion in stock and debt, the biggest takeover of a U.S. long-distance phone company by a Canadian one.
Teleglobe will issue 0.885 share for each Excel share, valuing Excel at $22.84 a share. That’s 17 percent less than Excel’s closing price on Friday and reflects Teleglobe’s planned 2-for-1 stock split. Dallas-based Excel also forecast that sales in the current quarter will be less than expected.
The transaction is the latest in a wave of buyouts in the phone industry, as companies seek to offer a wider range of services. Montreal-based Teleglobe is Canada’s main overseas long-distance company and wants to use Excel’s sales strategy to expand in Europe and Japan.
“Teleglobe gets a residential business immediately plus they get to take Excel’s marketing expertise around the world,” said Michele Fox, an analyst at Bear Stearns & Co. in New York.
Excel stock fell $5.81, to $21.75; Teleglobe climbed 50 cents, to $52.12.
