STOCKWATCH: Bookham up as vague Nortel bid rumours resurface
LONDON (AFX) - Bookham Technology PLC shares topped the FTSE 100 leaderboard
at midday, as vague rumours resurfaced in the UK market that Nortel Networks
Corp was considering a bid at 85 stg a share bid, dealers said.
At 11.51 pm, Bookham's shares were up 265 to 3585.
Nortel -- which is Bookham's largest customer, accounting for over half of
is revenue -- was rumoured to want Bookham to capture sole access to its
technology.
Teather and Greenwood analyst Phil Smith, who recently completed a review of
Bookham's optical market, said Nortel in particular has historically been active
buying proprietory technology to use for its exclusive use.
"Over the past year, 66 bln stg has been spent by Cisco, Corning, JDS
Uniphase, Lucent, Nortel and Redback in acquiring optical technology companies,"
he said.
"Those companies that were acquired between them turned over 1 bln stg, and
in some cases had zero sales. Nortel in particular has spent over 4 bln stg in
paper deals on Qtera and Xros, both optical switching companies with zero
revenue."
Williams De Broe analyst Sanjay Jha added that, although he had not heard
the specific Nortel rumour, "it wouldn't be a surprise" if Nortel made an
approach.
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