Lucent Jumps on Rumors of Nokia Bid
NEW YORK (Reuters) - Shares of Lucent Technologies Inc. jumped 11
percent on Tuesday amid market rumors of a takeover attempt by Finnish
equipment giant Nokia Corp. (NOK1V.HE)(NYSE:NOK - news), and
optimism about Lucent's plan to spin off its microelectronics unit.
Shares of Lucent (NYSE:LU - news), the world's largest telecommunications
equipment maker, gained $2-1/8, or 12.4 percent, to $18-3/4 in heavy
midday trading on the New York Stock Exchange (news - web sites). The
stock has fallen 75 percent so far this year. Nokia's American depositary
receipts traded at $50, down 1/2, on the New York Stock Exchange.
``There're rumors of a Nokia bid,'' said Wasserstein Perella Securities analyst
Eric Buck.
Lucent declined to comment on the market rumors.
Nokia Ab, Oy (NOK1V.HE) NOK.N, the world's largest and most profitable mobile telephone maker,
declined to comment. ``That's nothing we want to comment on,'' Nokia chief spokesman Lauri Kivinen said.
Buck said he had no knowledge of whether the rumors were true, but he said the companies offer each other a
good mix of products and geographic strength.
``I can't dismiss it as impossible,'' Buck said.
Other analysts said such a pairing would be unlikely.
Lucent, based in Murray Hill, N.J., is trying to restructure its operations, cut costs and jumpstart growth after a
year of disappointing profits and product fumbles. Potential suitors may want to wait until Lucent sorts through
its problems and cuts its staff, analysts said.
Wall Street expects the company to cut about 10,000 employees, or about 8 percent of its work force.
A massive acquisition of Lucent, which has a market capitalization of $64 billion, would be out of character for
Nokia, analysts said.
Over the last two years Nokia has made a series of small acquisitions to bolster its research and development
capabilities. Nokia previously has said it aimed to expand its mobile phone division, which comprises the
majority of its business, by taking market share and not by acquiring other companies.
Separately, analysts said investors were pleased that Lucent appeared to be making progress in its plan to spin
off its microelectronics business.
Lucent on Monday filed a registration statement with the U.S. Securities and Exchange Commission (news -
web sites) for the initial public offering for up to 20 percent of the unit, which will be called Agere. The IPO is
expected by the end of the first quarter of 2001, and a full spin-off should be completed by summer.
``Investors believe we're getting some meat around of bones of the spin-off. There are some who believe that
the spin-off is worth almost as much as the whole stock is trading at right now,'' said James Stone, an analyst
with Stifel Nicolaus & Co.
Agere makes semiconductors and optical components for communications systems.
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