UPDATE 1-Lucent fiber unit bids as low as $3 billion-source
(Reuters, 06/21/2001 19:51)
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CHICAGO, June 21 (Reuters) - The latest offers for Lucent Technologies Inc.'s (NYSE:LU) fiber-optic cable unit are coming in at $3 billion to $3.5 billion, even lower than last projected by analysts, a source close to the situation said on Thursday.
The Atlanta-based unit, which some analysts once thought would attract bids as high as $8 billion, also has attracted interest from Linthicum, Maryland-based Ciena Corp. (NASDAQ:CIEN), the source said. One possibility could include a private equity firm helping Ciena with financing for the deal, the source said.
Lucent officials declined to comment, other than to say the sale process is continuing and includes several bidders. Ciena officials declined to comment.
Other potential buyers include French telecom gear maker Alcatel (SBF:CGEP) (NYSE:ALA) and Italy's cable and tire maker Pirelli SpA (MILAN:PIRI). The source said other "dark horses" are also involved in the auction.
Under its credit agreements, Lucent has until Sept. 30 to raise $2 billion in nonoperating cash so it can complete the spinoff of Agere Systems Inc. (NYSE:AGR.A) The telecom equipment giant has been negotiating to sell the fiber cable unit for months.
Lucent's shares closed up 31 cents, or 5.84 percent, at $5.62 in Thursday trading on the New York Stock Exchange after hitting an all-time low on Wednesday. Over the past year, they have underperformed the Standard & Poor's 500 index by about 90 percent.
Shares in Ciena, which makes equipment that increases the capacity of fiber-optic telecommunications networks, closed up $1.78, or 4.75 percent, at $39.24 in Nasdaq trading. Over the past year, they have outperformed the Nasdaq 100 index by about 12 percent.
Murray Hill, New Jersey-based Lucent is struggling to restructure its operations amid the slowdown in telecom equipment spending by long-distance and local phone companies.
The economic slowdown led the world's largest telecom gear maker Nortel Networks Corp. (NYSE:NT)(TSE:NT) last week to announce plans to cut 10,000 jobs and predict a staggering $19.2 billion second-quarter loss.
Earlier this month, Lucent said it offered more than 10,000 employees early retirement packages in an effort to speed up its turnaround. Several days later, Standard & Poor's cut its credit rating on Lucent to junk, raising its borrowing costs.
The tougher economic conditions have made it more difficult for Lucent to maximize sources of cash from the sale of the fiber cable unit as well as at least two plants. The company also is coping with the increased cost of borrowing and greater difficulty accessing capital markets. benjamin.klayman@reuters.com))
Copyright 2001, Reuters News Service |
