Rumor: Rackspace Hostings Inc. Could Get $55/Share Bid

Rackspace Hosting, Inc. RAX may fetch a bid of $55 a share from landline phone company CenturyLink, Inc. CTL, according to a British-based blogger and freelance journalist.

The writer, Ben Harrington, said CenturyLink, Monroe, Louisiana, is banging on the doors of U.S. banks hoping to line up $6 billion in financing for the deal. Harrington cited what he described as "excellent sources."

The deal has been rumored since at least July and was reported most recently last week by Bloomberg, which didn't cite an offer price.

Rackspace, a San Antonio-based cloud services company with a market capitalization of $5.6 billion, is facing stiff competition from the likes of Amazon.com, Inc. AMZN Google Inc GOOGL and many others.

In mid-May said it received buyout offers and hired Morgan Stanley to evaluate the bids and to “explore other alternatives.

Harrington also sought to revive earlier rumors that Rackspace could get a bid from Hewlett-Packard Company HPQ, which last week acquired Eucalyptus, a private startup that provides software for building clouds.

Rackspace closed Monday up 1.2 percent at $39 a share. Its stock has gained about 25 percent in value during the past month.