Savvis stockholders approve CenturyLink buyout

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Associated Press

Posted on July 13, 2011 at 1:01 PM

Updated Wednesday, Jul 13 at 1:02 PM

NEW YORK (AP) — Savvis Inc. said Wednesday its stockholders have voted to approve a sale to the phone company CenturyLink Inc.

The deal, valued at $2.5 billion, was announced earlier this year.

Approximately 99 percent of the votes cast approved the agreement at Savvis' special stockholders meeting held in St. Louis. The voting stockholders representing 86 percent of Savvis' shares outstanding, the company said.

The transaction is expected to close on Friday.

CenturyLink, which also recently acquired Qwest Communications International Inc., is expanding its business at a time when households are steadily canceling landlines in favor of cell phones or cable phone service.

Buying Qwest allowed it to cut corporate overhead by combining the third- and fourth-largest traditional phone companies into one.

Buying Savvis will help the company to expand the hosting and cloud computing services it offers to business customers.

Cloud computing allows companies to store data and applications on remote servers rather than on their own computers and to access them over an Internet connection.

The deal valued Savvis at $40 per share. Savvis stockholders will receive $30 per share in cash and $10 in shares of CenturyLink stock. As part of the deal, CenturyLink will also assume $700 million in Savvis debt.

CenturyLink, based in Monroe, La., plans to meld its hosting business and Savvis' managed hosting and cloud services into a single business unit based in St. Louis. It will be led by top Savvis executives including CEO James Ousley.

Together, CenturyLink and Savvis will operate 48 data centers located in North America, Europe, and Asia. They will have 50,000 combined employees.

Shares of St. Louis-based Savvis fell 2 cents to $39.64 in afternoon trading. They've traded between $14.95 and $39.84 in the past 52 weeks.

Shares of Monroe, La.-based CenturyLink shares slipped 33 cents to $38.98 a share. They've traded between $34.48 and $46.87.

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