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Technology Stocks : Ascend Communications (ASND)
ASND 201.40+2.3%Dec 10 3:59 PM EST
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To: Glenn D. Rudolph who wrote (27463)12/10/1997 9:18:00 PM
From: swrdfsh  Read Replies (2) of 61433
 
<<Lu cannot use the pooling of interests tax advantage until October 98.>>

Ahh
Good point.
But....How can ASND be part of this strategy? October 98 is so far away in network years. Too much can happen between now and then. If they have their eyes on ASND and are filling in the gaps to set things up for a smooth fit, how can they be assured that ASND will be available. With uncertainty regarding where ASND will be trading, its impossible to budget. If they really want ASND, I can't see them waiting that long. They could do a cash buyout now. How much extra would it cost them to do that vs. pooling of interest? AND,if then they have to pay an extra premium because they wait and in the meantime ASND goes up, at what point does that risk offset those costs? In other words, take the that extra cost of doing a cash buyout and divide it by the number of outstanding ASND shares. What do you get? I don't have the numbers to do it, but it seems to me, that is what they would have to weigh.

Another question: Is there any way LU could do a cash deal now and convert the debt in October so that the net cost would be about the same as if they could do a pooling of interst today? I'm no accountant, so that may be a dumb question. Sometimes if there is a will, there is a way that doesn't involve waiting that long.

Any thoughts??

swrdfsh
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