EricsSoft
>> Ericsson Denies Rumor Of Microsoft Bid
July 11, 2002
Stockholm, Sweden
Reuters
Swedish telecoms equipment maker Ericsson ( news - web sites) on Thursday denied a market rumor, which boosted its share 2.5 percent in a falling market, that Microsoft Corp would make a bid for it.
"On such rumors, please see the statement from last week from our Chairman Michael Treschow that we are not in any takeover talks or similar alliances, and that we are now focusing on the rights issue which is to be carried out in the third quarter," Ericsson spokesman Mads Madsen told Reuters.
At 0923 GMT Ericsson traded 2.5 percent higher at 16.2 crowns when the DJ Stoxx technology index was down 0.8 percent and the Nordic stock index was 1.5 percent lower, making Ericsson one of the top gainers in Europe.
"It's trading higher on a rumor that Microsoft would make a bid for Ericsson," a Swedish broker said.
Loss-making Ericsson, the world's biggest producer of mobile networks, has been buoyed by a plethora of rumors last week about its role in the expected consolidation of the sector after the share price hit seven year-lows around 13 crowns at the end of June.
Like other firms in the sector, Ericsson has suffered from a steep drop in demand from its customers amid a global economic slowdown, which was compounded by the announcement of a $3.2 billion rights issue, the details of which are yet to be revealed.
Playing on the uncertainty created by the lack of precise issue terms, hedge funds have sold short large amounts of Ericsson shares.
Dealers said they believed that Ericsson would announce the price and the number of shares it wants to issue together with its second quarter results on July 19, ending the uncertainty. <<
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