Tuesday, January 16, 2007

Verizon to Spin Off Landlines in NE

Verizon Communications Inc., the second-largest U.S. local telephone company, plans to shed phone lines in Maine, New Hampshire and Vermont as part of a strategy to focus on its wireless and television businesses.

Verizon will spin off the assets, which will then be bought by FairPoint Communications Inc. in a transaction worth a total of $2.72 billion, the companies said today in a statement. FairPoint shares jumped 15 percent, the biggest one-day gain since it sold shares to the public in February 2005.

Verizon shareholders will get $1.02 billion in FairPoint stock and own 60 percent of the expanded company. FairPoint's phone lines will rise from about 250,000 to 1.6 million, creating the eighth-largest U.S. telephone provider. The sale advances New York-based Verizon's plan to rely on divisions such as Verizon Wireless, where revenue grew 18 percent in the third quarter.