Not sure exactly how they'll do it.
The $10B in cash is the $25/share * # of LVLT shares. CTL has to come up with that. It looks like they have $10B in lending ready to go from MS and BAML.
For the stock, CTL can do a lot of things but just need to come up with the shares at the agreed upon conversion factor. Likely, CTL will issue new shares. Current CTL shareholders will hope that the dilutive effects will be offset by the accretive gains from owning a smaller chunk of a bigger company. Alternatively, CTL could use cash on hand (or from asset sales), treasury stock, and more to purchase shares to then hand over. I don't know CTL's plans.
Basically the company gets bigger when they add Level 3 to it so they can issue additional shares without diluting their current outstanding shares.
Think of it more as converting your Level 3 stock into Century Link stock.
Can you elaborate on this? Does CTL need to buy back shares so that they can use them to put towards the $15B in stock to put towards the LVLT transaction?
If this is so isn't this the equivalent of cash? Since they need to finance that purchase of stock? How would that not be $10B plus $15B?
If the source of that financing is creditors how do they get paid if not cash? Is this some kind of structured financing?