Interesting read:
newbridge articles from the national post:
nationalpost.com
This is one of my favorites:
Saturday, November 20, 1999
Newbridge could be sold within quarter
Jill Vardy
Financial Post
OTTAWA - Newbridge Networks Corp. has already received mating calls from potential buyers and could be sold in the current fiscal quarter, sources close to the company said yesterday.
Newbridge officials have spent the last two days gauging interest in buying the company. Morgan Stanley Dean Witter & Co. has been hired to evaluate any offers that are received.
Newbridge has received several phone calls from interested buyers, but no specific offer or proposal yet.
"We have said we're pursuing all strategic options. That includes the potential of teaming up with a larger player. Given this scenario we have in fact been receiving calls," said John Lawlor, Newbridge's vice-president of corporate communications. "There is a good level of interest in the asset values of Newbridge."
The message that Newbridge is open to takeover offers is considered a departure for Terence Matthews, the founder and largest shareholder of Newbridge. He was not available for interviews yesterday.
Paul Sagawa, technology analyst at Sanford Bernstein & Co. in New York, said finding someone to buy the company will be easy. "It's not a question of is there a company out there interested in Newbridge. The question is, is Newbridge, particularly Terry Matthews, willing to consider reasonable offers?
"I hope that it happens. But there is a risk that Newbridge will, as usual, overestimate its value and turn down reasonable offers, remain independent and break shareholders' hearts," Mr. Sagawa said.
Newbridge wants at least $40 (US) a share for the company, according to informed sources. A purchase price of about $33 (US) is probably closer to a reasonable selling price, analysts say. That would represent about four times the company's annual revenue from asynchronous transfer mode (ATM) products, considered the star of Newbridge's technology roster.
Mr. Matthews told employees at a staff meeting held at the Corel Centre on Thursday that Cisco Systems Inc., Nortel Networks Corp., Alcatel SA and LM Ericsson AB are all potential suitors. Newbridge officials later said those companies were named simply to illustrate the size and type of company that may be interested.
Earlier this week, Alcatel's chief executive said it had no plans to try to buy Newbridge. The other three companies did not respond to market speculation yesterday.
Analysts think the list of companies looking at Newbridge is much longer than the one mentioned by Mr. Matthews. "It is my opinion from the information I've gathered that we can expect the firm in all likelihood to receive expressions of interest from pretty well everybody in the space other than Nokia Oyj and Lucent Technologies Inc.," said Robert MacLellan, technology analyst at CT Securities. "Those expressions of interest are a long way from an offer and a merger, but it's one nice step in the right direction."
Mr. MacLellan yesterday upgraded his recommendation on Newbridge stock to "buy" from "trading buy" and increased his stock price target to $33 (US). But he also dropped his earnings projections to 52½ this year from 64½ and 83½ from 93½ next year. (Earning estimates are in U.S. dollars.)
Lucent is considered out of the running because it bought Newbridge rival Ascend Communications Inc. last January.
The merger helped propel Lucent ahead of Newbridge in ATM sales in the critical U.S. market. Nokia recently sold off one of its switching divisions and is concentrating on selling wireless data network equipment. |
