My take is that they said "what the heck, lets give it a try".
I don't know, I kind of doubt that they'd make such a move so lightly. Pat probably has a better perspective, but Scifres for one doesn't strike me as the type of CEO who just tries something like this just for the hell of it, with a cavalier attitude. I think they mean business, and I'd guess they've done some due diligence on what it would take to pass Justice. That probably includes some divestitures. I didn't follow WCOM/FON that closely, but my vague understanding was that WCOM didn't want to give up Sprint's long-distance biz, which was a dealstopper. If they'd just gone after wireless and let LD be spun off, the outcome could have been different.
In any case, the market's reaction is kind of interesting. On the one hand, SDLI remains at a serious discount to the implied value, indicating skepticism that it will go through. On the other hand, JDSU took a big hit, as if there is indeed anticipation of a merger. Probably reflective of some of both sentiments (skepticism and anticipation), I guess.
It's unlikely they would say it would be bad for customers.
Actually, it probably would have some benefits, given the severe supply shortages. If customers can't get product, then they can't roll out. That hurts them. A bigger, combined manufacturer should be capable of pushing more product due to scale efficiencies and such.
I'm not at all saying the deal will go through; just that it might, and that JDSU/SDLI mgmt. are not flakes who would go public with something like this if they were not serious and had not reason to think there's a decent chance of approval. After all, they, like the talking heads on CNBC, are also aware that JDSU just completed a merger, and that WCOM/FON got turned down. They won't look particularly good if the deal fails, so they have an interest in trying to see it through. |
