Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 210.50

+0.5%

Nov 21 9:30 AM EST

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To: blankmind who wrote (26652)	12/6/1997 4:05:00 PM
From: gerard mangiardi	Read Replies (1) of 61433

People talk about dilution on an EPS basis, ie would an aquisition be immediately acretive or dilutive. I have seen very little analysis on this thread on the impact of an aquisition by either LU or Cpq on this subject. As I had posted previously I believe that Lu would be buying at least $2 a share in earnings in the first year after purchasing ASND. I think Asnd on its own will earn close to $1.50 and there would be another .50 in synergy\cost savings contribution. This would allow LU to pay about $60 in stock for the aquisition to be done in an non-dilutive manner, as I believe Lu is trading at at least 30x earnings. I also asked if anyone thinks Lu issuing deep in the money warrants as part of an aquisition price would be a way around what pooling of interests constraints may be in place for LU. I don't believe CPQ would get the other .50 in earnings power that LU would due to the fact that there is not enough synergy in the comapny's marketing or R&D.

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