Lucent Close to Agreement to Buy Ascend for $16 Billion, Report Says
Bloomberg News
January 11, 1999, 12:27 a.m. T
Lucent Close to Agreement to Buy Ascend for $16 Bln, FT Reports
Murray Hill, New Jersey, Jan. 10 (Bloomberg) -- Lucent
Technologies Inc., the world's largest phone-equipment maker, is
in talks to buy Ascend Communications Inc., the fourth-largest
maker of computer networking equipment, for more than $16
billion, the Financial Times reported.
An announcement about a purchase could come as early as
Wednesday, the FT said, citing unidentified people close to the
talks. Lucent and Ascend officials declined to comment.
Investors have speculated for more than a year that Murray
Hill, New Jersey-based Lucent may make a bid for Alameda,
California-based Ascend. Ascend would give Lucent the top-selling
switches that combine voice and data traffic on networks and help
the combined company compete against rival Cisco Systems Inc.
Lucent and Ascend have talked in the past, though
the companies haven't been able to agree on a price, a person
familiar with those earlier discussions said.
Ascend has developed a switch for routing large amounts of
data on phone networks that Cisco won't be able to match until
midyear, analysts have said. Ascend's lead is helping it win and
retain business from phone companies.
Last May, Lucent bought Yurie Systems Inc., which makes
products similar to Ascend, for $1 billion.
Ascend shares, which have more than doubled in the past
three months, rose 1 3/8 to 71 7/16 Friday, giving the company a
market value of $15.5 billion. Lucent, which has also doubled
over the same period, fell 1 1/4 to 115 1/4. Its market value is
$154.97 billion.
Options to buy Ascend at $75 a share soared Friday to $2 a
contract, double Thursday's price. About 2,600 contracts traded,
more than triple the daily average.
--Andrew Brooks in the Princeton newsroom (609) 279-4066/shw |
