Analysts: Level 3-tw telecom Merger Will Receive Significantly Less Regulatory Scrutiny Than Mega-Deals

**Editor’s Note: Click here for Channel Partners’ extensive coverage of the proposed Level 3-tw telecom acquisition.**

tw telecom will report its latest earnings in just a few hours, and analysts for Canaccord Genuity are expecting strong results as the provider marches toward its $7.3 billion acquisition by Level 3 Communications Inc.

Greg Miller and Matthew Kahn are predicting higher revenue and better margins. They said those items have improved as tw telecom expanded into new markets and saw greater productivity from salespeople.

Despite the predicted solid earnings news, Miller and Kahn expect the conference call to focus on the pending merger with Level 3. And they’re upbeat on the tw telecom acquisition’s completion date.

“Unlike the mega-deals, we continue to believe this combination will receive significantly less regulatory scrutiny and will likely be completed along a timeline consistent with deals of similar size,” Miller and Kahn wrote.

As a result, they raised their target on tw telecom to $45 “to reflect our valuation of the company in the context of our view on Level 3 and in accordance with the terms of the acquisition.”

They also maintained their “buy” rating.

Level 3 plans to wrap up the tw telecom purchase in the fourth quarter. In anticipation of that, the company already has named its new management team.

For its part, Level 3 just reported a $51 million profit for the second quarter. tw telecom, meanwhile, will announce its results after the bell today.