Goldman Sachs Unfazed by CenturyLink/Qwest Merger Talk, Remains Neutral

Goldman Sachs is staying neutral in its valuation of CenturyLink

and Qwest

. Merger talks begain in October 2009 between Quest and a private equity firm, but broke off on March 19th. In Goldman's view, "Given the size of Q (about $20bn EV), a private equity control scenario was never really feasible, in our view. CTL remained as the only logical partner." Upsides for the merger are greater synergies and macro opportunities. Possible risks include a difficult deal integration and regulatory hurdles. Goldman Sachs' 12-months price targets for CTL and Q are $38 and $5.75, respectively.