From Globe and Mail: ERICY denies 3rd time; CSCO in the wings?
( My comments in Italics )
globeinvestor.com
No interest in acquiring Newbridge: Ericsson
by Mark Evans - Wednesday, November 24, 1999
( This is the 3rd? denial we have had fron this Damzelle
that she is not getting married; perhaps they left their Investors Relations voice recorder switch accidentally in
the " on " position )
L.M. Ericsson Telephone Co. Inc. said yesterday that it has no interest in buying Newbridge Networks Corp., whose
shares continued to rise on growing speculation that one of a growing number of suitors could soon make a takeover bid for
the struggling communications equipment company.
Ericsson spokesman Gary Pinkham told Bloomberg News the Swedish company will not make a bid for Kanata, Ont.-based
Newbridge despite reports that it was "doing due diligence" related to the purchase of a minority stake in Newbridge.
"As it stands now, we're not interested in buying Newbridge," he said. "I don't know that we've ever been interested."
Before Ericsson's announcement, Newbridge shares climbed $1.15 to $33.20 on the Toronto Stock Exchange -- their highest
level in nearly six weeks.
Despite Ericsson's departure from the scene, potential bidders for Newbridge include Brampton, Ont.-based Nortel
Networks Corp., France's Alcatel SA, Lisle, Ill.-based Tellabs Inc., Germany's Siemens AG and San Jose, Calif.-based
Cisco Systems Inc.
Nortel and Tellabs declined to comment yesterday on any interest in Newbridge.
Tellabs said last week that it held preliminary talks with Newbridge in March, while Nortel considered the purchase of
Newbridge last year before it struck a deal to buy Bay Networks Inc. of Santa Clara, Calif.
Albert Goller, president and chief executive officer with Siemens' Canadian unit, also declined to comment on his company's
interest in Newbridge.
"We have a very good and close relationship with Newbridge on the sales and marketing sides," he said. "A big portion of
Newbridge's revenue comes from Siemens' worldwide organization and Newbridge has always been a good partner."
Iain Grant, managing partner with Brockville, Ont.-based Yankee Group, said although Siemens has had a long relationship
with Newbridge, it's more likely that Alcatel or Cisco could emerge as the leading contenders.
He said an intriguing component of Cisco's possible interest in Newbridge is the presence of Scott Marshall, a
vice-president with Cisco's service provider access and aggregation products unit.
Before joining Cisco in August, Mr. Marshall spent 12 years with Newbridge, most recently as executive vice-president of
switching products.
"Scott Marshall was [Newbridge chairman] Terry Matthews' right-hand man in technology," Mr. Grant said.
If Cisco bought Newbridge, it would pick up Newbridge's asynchronous transfer mode (ATM) technology and blue-chip
customers. That would give Cisco valuable assets to compete with Nortel and Murray Hill, N.J.-based Lucent Technologies
Inc.
(tacit admission: CSCO has no ATMs :-)
Mr. Grant said that although Cisco does not have a track record of purchasing established companies with large amounts of
revenue, it has spent more on some deals than the $6-billion it would cost to buy Newbridge.
( bought Cerent for ?13 bill, box unopend; no earnings; minutes before the IPO; how much time did CSCO spend doing
DD on Cerent?) |
