UPDATE 2-Savvis not in sale talks, eyes partnership -CEO

Fri Jan 28, 2011 8:24pm EST

* Savvis has not retained a bank, despite consolidation

* Seeking a financial partner for certain businesses

* Expansion expected with Asian partner in 1Q

* Shrs of Savvis, peers Rackspace Hosting, Equinix rise (Adds share movement of peers, closing share price, byline)

By Nadia Damouni

NEW YORK, Jan 28 (Reuters) - Information technology services provider Savvis Inc SVVS.O is not actively shopping itself despite escalating consolidation within the network industry, company Chairman and CEO Jim Ousley told Reuters.

Shares of Savvis rose almost 14 percent on Friday after speculation that it could be the next takeover target a day after Verizon Communications' (VZ.N) said it planned to buy rival Terremark Worldwide Inc TMRK.O for $1.4 billion.

"We talk to a lot of different bankers, but we do not have one on retainer today. I guess if that sends a signal that we are not out trying to sell ourselves, that is as good a signal there is," Ousley said.

The Savvis executive said he was not surprised by the merger announcement between Verizon and Terremark, which already shared a partnership.

Terremark deals with IT outsourcing, and helps companies adopt cloud computing -- an increasingly popular technology that allows remote access to computing power and data over the Internet.

Other data center services companies saw their shares soar on Friday, including Rackspace Hosting (RAX.N), which closed 4.8 percent higher at $33.77. and Equinix Inc (EQIX.O), which was up 1.3 percent at $88.82 per share. Analysts singled out data hosting firms Savvis and Rackspace as among potential acquisition targets.

Shares of Terremark jumped 35 percent to $18.98 -- their highest in a decade -- after Verizon's offer, which represented a 35 percent premium over Terremark's Thursday close.

"Telcos have been focused the last three or four years on consumers and cell phones and cell build out. That has kind of peaked," said Ousley.

PARTNERS

Despite being in constant dialogue with Verizon, which is one of several large vendors providing network bandwidth to Savvis, Ousley said he had not received any indication that the telecom giant wanted to buy a cloud company.

Still, Ousley said Savvis could seek a partnership to help finance some of the company's more capital intensive business. Savvis has existing relationships with telecom providers including Verizon, AT&T Inc (T.N) and Level 3 Communications Inc LVLT.O, and is in discussions with all the "major ones all the time," said Ousley.

Savvis is also expected to announce in the first quarter a partnership with a potential network provider in India or China to increase Savvis's presence in the region, Ousley said. He declined to provide specific details.

Savvis shares rose $3/69, or 13.9 percent, to end at $30.26 on the Nasdaq on Friday. (Reporting by Nadia Damouni and Saqib Iqbal Ahmed; Editing by Gary Hill)

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