Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of U.K.-basedInterxion Holding jumped 14% today after the data center companyannounced a nonbinding merger with TelecityGroup.
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So what: The key driver behind the stock's move is undoubtedly the structure of the deal. Under the proposed transaction, Interxion shareholders would receive 2.3386 new Telecity shares for each Interxion share -- a per-share value, according to Interxion's press release announcing the merger, that indicates a 15% premium to Interxion's closing share price on Feb. 9 of $26.47.
Now what: Considering the structure of the deal, today's price spike is definitely warranted in the near term. But over the longer haul, investors will need to digest the implications of the merger.
According to Interxion, the merger will create value through synergy:
Given that proposed mergers don't always go through, shareholders shouldn't necessarily count on management's rosy outlook. That being said, the two companies' similarities and a quick read over the announced merger do not suggest any negative implications from the proposal.
The article Why Shares of InterXion Holding NV jumped 14% Today originally appeared on Fool.com.
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