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Technology Stocks : Newbridge Networks

NN 12.62

-0.2%

3:48 PM EST

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To: Tunica Albuginea who wrote (15352)	12/5/1999 1:08:00 AM
From: fumble	Read Replies (1) of 18016

Lets play Investment Banker. The strategy is to offer 'bottom-line more' for the stockholders of NN. Who are these stockholders? There are probably 5 categories 1) TM 2) Canadian employees of NN with their shares in some govt fund 3) US citizens with long term position 4) US citizens with short term position 5) US citizens with shares in IRA Possible druthers - 1) I don't know what TM would prefer - cash or shares in an acquirer. 2) Would prefer shares in a Canadian company (eg NT) 3) Would probably prefer shares in a US company 4) Would certainly prefer shares in a US company 5) Does not care - cash soon, or bigger shares later. ------ Tax considerations --- How are the tax laws in Canada (do you pay capital gains tax?) US citizens can pay around 40% of their gain if they are short term and the payout is in cash. US citizens can pay around 20% of their gain if they are long term and the payout is in cash. ---------- Does anyone have a rough idea of the % ownership in each of these categories? ---------- Suppose that Cisco were to buy NN for stock. Is there some way that an investment banker could identify those stockholders who have shares in a Canada-only plan (#2 above) and offer them a basket of Canadian stocks which were acquired by swapping Cisco stock for (.. NT ..). Suppose that Siemens were to buy NN for stock. Would the investment banker move Siemens shares to the US - creating ADRs for those shares and then use the ADRs to swap for NN shares? Are there other possibilities?

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