Nice post Tom. I would like to undeline the " good parts " :
globeandmail.com
Alcatel SA is in "serious discussions" to buy Newbridge Networks .
"It's down to the nitty gritty,"
A Newbridge spokesmanÿ said that the process of trying to find a buyer is going well.
" the French company provides a better fit than any of the other five "
"There's enough smoke that a deal is likely to happen,"
Newbridge is expected to release much-improved numbers .
( which ) would make the deal
an easier sell to the buyer's board of directors and shareholders.
Newbridge would also prefer to wait until its quarterly results have been tallied,ÿ
analysts say, so that the company can demand a higher selling
price.
:-)
TA
Message #17115 from Tom Drolet at Feb 17 2000 6:38AM
zbyslaw et al:
FYI--Globe and Mail front headline ROB today-Thursday.
Tom D.
Newbridge sale said imminent.
Telecommunications giant Alcatel in 'serious discussions'
after two other suitors walked away last week.
SIMON TUCK
Technology Reporter
Thursday, February 17, 2000
Ottawa -- Alcatel SA is in "serious discussions" to buy Newbridge Networks Corp. and a deal could be announced as soon as Tuesday, industry sources say.
The Paris-based telecommunications giant was left as the only serious bidder for Newbridge of Kanata, Ont., when two other prospective buyers -- L.M. Ericsson
Telephone Co. Inc. of Sweden and Siemens AG of Germany, Newbridge's most important partner -- walked away from the takeover talks more than a week ago, a
source familiar with the negotiations said yesterday.
"It's down to the nitty gritty," said the source, a well-connected industry executive. "They're in serious discussions."
The departure from the scene of Ericsson and Siemens has left Newbridge with less room to leverage a higher price from Alcatel, which is believed to crave
Newbridge's telecommunications switching portfolio.
A Newbridge spokesman would not comment, except to say that the process of trying to find a buyer is going well. An Alcatel spokesman in Paris also refused
comment.
One analyst said a deal between Alcatel and Newbridge makes sense because the French company provides a better fit than any of the other five or six
prospective buyers that have kicked Newbridge's tires in recent months.
"There's enough smoke that a deal is likely to happen," said the analyst, who asked not to be named.
It's unlikely an announcement will be made before Tuesday, when Newbridge is scheduled to release its third-quarter results. That's because Newbridge is expected
to release much-improved numbers over its disappointing results from the previous quarter, which would make the deal an easier sell to the buyer's board of
directors and shareholders.
Newbridge would also prefer to wait until its quarterly results have been tallied, analysts say, so that the company can demand a higher selling price. The company's
sales team, particularly in the lucrative U.S. market where Newbridge has been struggling, is under intense pressure to put together a strong quarter to help out the
company's negotiators.
Newbridge has been rumoured to be a takeover target for more than a year as the data and voice telecommunications equipment makers have converged. The
company routinely denied it was on the block until November, after releasing its latest batch of disappointing results.
"I think Terry's got to sell and the whole world knows it," an analyst said.
If Newbridge doesn't announce a deal by Tuesday, analysts said, investors might become concerned that negotiations have fallen apart and begin a selloff.
Analysts said they expect the selling price for Newbridge to be between $40 (U.S.) and $45 a share.
END
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