Why CenturyLink Shareholders Have Nothing to Worry About (for Now)

Recently, I wrote about a possible delay in the CenturyLink (NYSE: CTL)-Level 3 Communications (NYSE: LVLT) merger, and the accompanying actions taken by activist hedge fund Corvex Management. As the merger is crucial to the future of CenturyLink shareholders, any sort of uncertainty surrounding approval would throw a wrench into the investment thesis for either of these two companies.

Due to increasing competition in the telecom space and a secular decline in many of CenturyLink's legacy businesses (such as copper wire landlines), CenturyLink has continued to post deteriorating operating results as it attempts to invest in future technologies while keeping costs in check in preparation for the merger.

That's why the stock has continued selling off this summer, and why the dividend yield stands at a sky-high 11.5%. When it seemed as though California may delay the merger, that added to the skepticism. However, a recent announcement from the California Public Utilities Commission gives me confidence the merger will close eventually, albeit later than originally planned.

Source: Fool.com