Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 201.40

+2.3%

3:59 PM EST

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To: john dodson who wrote (18161)	10/20/1997 6:12:00 PM
From: Maverick	of 61433

According to SEC rule. a co. can't acquire another co. using the pooling-of-interest method for 2 years after being spun off (LU was spun off from AT&T). LU didn't buy ASND months ago because ASND was too high and LU was still subject to the SEC rule. Had LU acquired ASND when ASND was in the 50's, ASND mgmt would have asked for 70's; whereas, ASND is in the 30's, a premium over this could be in the 50's. Let's say LU can negotiate a good deal by paying 8x annual sale of ASND. At the annual revenue run rate of 300 MM * 4 = 1.2 Bil, the offer would be 1.2 Bil * 8 = 9.6 Bil. The number of outstanding shares is roughly 200 MM. Thus the acquisition price would be 9.6 Bil / 200 MM = $48/shr minimum.

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