PALO ALTO, Calif. -- Ascend Communications Inc.'s
(ASND) plan to buy Cascade Communications Corp.
(CSCC) won't be derailed by today's fall in Ascend's stock,
Mory Ejabat, Ascend's chief executive, said.
Investors appear to be taking a short-term view of the
proposed combination and failing to see its longer term
opportunities, Ejabat told Dow Jones.
Ejabat said he expected Cascade's frame-relay products to
get ''back on the growth curve'' and that its ATM switches
will provide the combined company with a strong product
set in the Internet service provider and telecommunications
carrier markets. The ATM, or asynchronous transfer mode,
products will offer service providers one-stop shopping
when paired with Ascend's remote access concentrator and
GRF line of high-performance routers.
Ascend also has successfully competed against industry
giant Cisco Systems Inc. (CSCO) for years, Ejabat said,
suggesting that now should be no different. He said
Ascend's sales into the Internet service provider market
appeared good this quarter.
Investors have worried about a slowing market.
As reported, Ascend offered to buy Cascade in a $3.7
billion stock swap announced Sunday night. In trading
today, Ascend's shares fell almost 22%, or 11 1/4, to 40
3/4, erasing the nearly $8-a-share premium it had offered
for Cascade's stock.
At the end of the day the value of the merger had fallen to
about $2.8 billion.
But Ejabat said he was not dissuaded. Ascend received lots
of calls from customers and the feedback from them is
good, he said.
He said that over the next few months Ascend and Cascade
would work to integrate their network management
softwares. Customers are showing increased interest in
management software as networks grow more complex and
the quality of a network's service becomes a more important
selling point.
Cascade has cited customer indecision as the cause of
slower in its frame-relay market. |
