Bloomberg - Bay Shares Rise Amid Optimism It May Receive Takeover Offer
Bloomberg News
May 28, 1998, 12:59 p.m. PT
Bay Shares Rise Amid Optimism It May Receive Takeover Offer
Santa Clara, California, May 28 (Bloomberg) -- Bay Networks
Inc. rose as much as 10.8 percent amid optimism the computer
networking company will be sold to a large phone equipment maker,
such as Northern Telecom Ltd.
Bay rose 2 5/8 to 28 1/2 in late trading of 13.1 million,
more than three times the three-month daily average. Earlier,
shares touched 28 11/16.
Activity increased for call options that give the owners the
right to buy Bay Networks stock at 27 1/2 until the option
expires in June. More than 7,500 of the call options traded
today, up from 1,300 yesterday and just 469 on Tuesday.
A call option is the right to buy 100 shares of a specific
stock at a specific price within a given time in exchange for a
premium. The buyer will profit if the stock rises.
Earlier this month several analysts said Nortel made an
offer to purchase Bay, although they didn't know the value of the
offer.
''I've heard nothing specific. But at this point people
think anything could happen with Bay,'' said Scott Heritage, an
analyst with UBS Securities who rates Bay ''hold.''
A Bay spokesman declined to comment.
--John Shinal in the San Francisco newsroom (415) 912-2995/pkc
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