Genuity said today that Level 3 Communications"s $242 million acquisition bid is the only qualified offer. The declaration effectively eliminates the possibility of another buyer swooping in. The companies, which provide wholesale Internet access, Web hosting and other networking services, "will move forward to complete the acquisition process with a sale hearing on January 21, 2003," Genuity said in a statement.
The bid review process was mandated under Genuity"s Chapter 11 bankruptcy protection filing and is one of the last hurdles before the deal is completed. Last month, regulators at the Federal Trade Commision and Department of Justice signed off on the proposed acquisition, saying it would not violate anti-trust laws.
Earlier this week, Level 3 reportedly laid off 150 people, or 2.5 percent of its workforce. Larger cuts are expected this year as the Broomfield, Colo.-based company undertakes the integration of Genuity. The sale will end a two-year roller coaster ride for Geunity. Formerly the Internet division of GTE Corp., Genuity spun out as part of GTE"s merger with Bell Atlantic, now Verizon Communications, in 2000.
Following the merger, Genuity spent millions of dollars on advertising and corporate sponsorship of golf tournaments and other events to raise the profile of the company and its Black Rocket service. But as large customers delayed or canceled orders for IT equipment and services, Genuity suffered. Then, this summer, Verizon decided not to reintegrate the company, leaving management searching for a survival strategy. The milestone comes a day after XO Communications emerged from Chapter 11 bankruptcy, with significantly less debt and a plan it believes will turn profits.