Global Crossing Won’t Make S&P; After Merger
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Global Crossing Ltd., which plans to complete its $12.9-billion purchase of Frontier Corp. by October, won’t be included in the Standard & Poor’s 500 index because it will continue to be based outside the U.S., Global Chief Executive Robert Annunziata said.
Frontier of Rochester, N.Y., the No. 5 U.S. long-distance phone company, is a member of the benchmark S&P; 500.
The combined company will have headquarters in Hamilton, Bermuda. Global Crossing is currently based there, though it has executive offices in Los Angeles.
Companies’ shares often fall when they drop out of the S&P; 500 because many mutual funds that try to mimic the index’s performance sell the shares. Global Crossing shares have dropped about 33% since it reached agreement to buy Frontier. On Tuesday, they fell 31 cents to close at $30.63 on Nasdaq.
They could fall further if the combined company isn’t in the S&P; 500, some analysts warn.
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