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Technology Stocks : DSC Communications
DIGI 0.00010000.0%Jun 3 1:06 PM EST
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To: CJ who wrote (4274)6/4/1998 3:13:00 PM
From: Steve Fancy  Read Replies (3) of 4429
 
RESEARCH ALERT - DSC (NASDAQ:DIGI) deal seen beneficial

Reuters, Thursday, June 04, 1998 at 14:53

NEW YORK, June 4 (Reuters) - Southwest Securities said that
DSC Communications Corp.'s proposed acquisition by French
telecommunications giant Alcatel Alsthom (NYSE:ALA) was attractive
for DSC shareholders.
-- Southwest analyst Manuel Royo maintained his accumulate
rating on DSC.
-- Royo said in a research note that the acquisition was a
very good fit for Alcatel.
-- He said that under the terms of the $4.4 billion
stock-for-stock deal there are no caps or floors. A walkaway
clause stipulates that the transaction can be called off
without liability if Alcatel's American Depositary Share price
falls below $37.
-- There is a stipulation whereby the walkaway level can be
reduced to $35 if the S&P 500 index falls by eight percent by
the time the transaction is closed, Royo said.
-- Royo said the initial market reaction to the deal
implied that Alcatel was overpaying, as its ADS shares were off
4-7/16 at 39 in New York trading. But Royo said DSC's large
installed bases of Litespan and AIN STP switches represent a
significant annuity-type revenue generator.
-- DSC was up 7-9/16 at 27-1/4 in afternoon trading.

Copyright 1998, Reuters News Service
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