Doug:Sale of NN: Two weeks left to end of the year.
Posted previously,
but this is only 10 days old:
"Newbridge is in discussions with everyone. But it
appears there are a couple [of potential buyers] that
have taken it a step further. I think there will be a
deal done by the end of the year," said one person
who attended the conference hosted by CT
Securities Inc., but did not want to be quoted.
nationalpost.com
Tuesday, December 07, 1999
Newbridge selloff gains
momentum Deal seen by year-end
Financial Post
OTTAWA -
Newbridge Networks Corp.'s search for a buyer has
proceeded beyond initial discussions with several
prospective suitors, say investors who attended a
meeting with Newbridge officials late last week.
"Newbridge is in discussions with everyone. But it
appears there are a couple [of potential buyers] that
have taken it a step further. I think there will be a
deal done by the end of the year," said one person
who attended the conference hosted by CT
Securities Inc., but did not want to be quoted.
Ken Wigglesworth, Newbridge's chief financial
officer, declined to comment when asked at the
meeting if the firm had signed non-disclosure
agreements with any company. Such an agreement
would suggest talks have progressed to the point at
which a buyer is examining Newbridge's
technology and financial statements.
Mr. Wigglesworth told clients of CT Securities that
any sensitive questions would not be answered
during the luncheon presentation but that he would
try and respond to them during individual meetings
afterwards. "The people who had one-on-one
meetings were buying stock afterwards," said one
attendee.
Newbridge has set up an internal management
committee, headed by Mr. Wigglesworth, to act as
liaison between the board of directors and Morgan
Stanley Dean Witter, the brokerage hired to
evaluate any takeover offers.
The board also has a subcommittee struck to
consider any bids that are received. Mr.
Wigglesworth met with several members of the
board after his Friday meeting.
My Note:Flynn was not immediately present in these discussions
as to who maybe buyine NN. So that he may be out of that loop.
So that any comments by him as to the buy out have
to be discounted some perhaps.
He also left the meeting several times to talk on the
phone to Pearse Flynn, Newbridge's president, who
was in Europe on Friday to talk to customers and
employees.
Mr. Wigglesworth was asked what kind of
company could buy Newbridge.
He said North American telecommunications
equipment companies would benefit more from
buying his company, but European firms need the
technology more.
There are six likely Newbridge suitors, said James
Kedersha, a technology analyst at SG Cowen
Securities Corp.: Cisco Systems Inc., Nortel
Networks Corp. and Tellabs Inc. of North
America, and Alcatel SA, LM Ericsson AB and
Siemens AG of Europe.
"Nobody has backed away yet," said an analyst
who attended Friday's meeting. Mr. Kedersha and
other analysts say it's likely a deal could be
announced before Newbridge's third quarter ends
on Jan. 31. But potential buyers may wait to see
how the company's products sold during the quarter
before making a bid.
Duncan Stewart, an analyst who runs several
technology mutual funds at Tera Capital Corp. and
who attended the meeting, said Newbridge has
three core assets that would be attractive: a large
and valuable staff, good products and a large base
of established customers.
Mr. Stewart said Terry Matthews, Newbridge's
founder and chief executive, appears to be
spending his time convincing worried customers
the firm's internal turmoil isn't interfering with its
ability to meet its customer obligations.
"Terry is the best telecommunications salesman in
human history ... his job now is to retain customers
and make sure Newbridge remains as attractive as
possible [to buyers]," he said.
Mr. Matthews, who is also Newbridge's chairman
and biggest shareholder, has been considered
reluctant to sell the company in the past, was
quoted on Nov. 18 as saying he was now open to
all possible options.
Rob MacLellan, CT Securities' analyst, told
investors at the meeting he has a target price of $33
(US) a share, but a serious takeover bid could push
the stock to $40 (US).
Mr. MacLellan would not answer media questions
about the meeting yesterday. Newbridge stock
closed yesterday at $33.25, up 5½ in Toronto. |
