Newbridge shares to be acquired by Alcatel
Newbridge Networks Corp NNC
Shares issued 180,104,582 Feb 29 close $50.35
Tue 29 Feb 2000
Mr. Klaus Wustrack of Alcatel reports
The Toronto Stock Exchange has approved the grant by Newbridge Networks to
Alcatel of an option to purchase up to 36,183,000 common shares of
Newbridge from treasury at $50.60 per share. The option, which is being
provided in connection with the acquisition of Newbridge by Alcatel, is
exercisable only where the break-up fee agreed to be paid by Newbridge is
payable to Alcatel. The value of the option together with the break-up fee
is capped at $375-million. At its option, Alcatel can elect to receive the
cash value of the option rather than common shares. Newbridge has also
agreed to grant registration rights to Alcatel. Any shares acquired under
the option may generally not be voted in connection with any proposed
business combination involving Newbridge.
In addition, Dr. Terence Matthews, the chief executive officer of
Newbridge, and certain controlled or associated companies have generally
committed, in a voting agreement entered into with Alcatel, to vote a total
of approximately 39.7 million Newbridge common shares held by them in
favour of the proposed merger with Alcatel or against any action that would
interfere with the proposed merger. Prior to completion of the merger, Dr.
Matthews has the right to sell up to 1 million Newbridge common shares.
The option agreement, as well as the voting agreement, were entered into by
Alcatel in order to enhance the likelihood of successful completion of its
proposed acquisition of Newbridge.
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