Drums-
I agree with your points. House said that they had been approached by "a half a dozen" companies in the past 18 months re merger/acquisition and Nortel's was by far the best. If someone else had made a better offer, don't you think they would have made it public by now?
Secondly, as you said, there was no guarantee(or even a hint right now) that LU would come after Bay in Oct; they could just as easily go after ASND(or continue to buy small companies like YURI). There is something to be said for the bird in the hand. Who out there believes Bay would be trading above $23 right now if not for the NT offer?
As I have posted before, who believes that anyone else will come forward with another bid before Bay posts their numbers in mid-July, given the reception NT got over concerns that they overpaid? No other Board is going to risk the ire of their shareholders until they can prove that Bay is back on track.
Rumors abound in both directions as to whether Bay will meet/miss/beat the current est for this quarter(about $596MM in revs). Until that question is answered, we will all just be blowing in the wind. In the meantime, I also do not like the fact that I have the opportunity to own 40% fewer shares of Bay at the price it was just 9 months ago(assuming a best case scenario of NT hitting a new 52 week high of about $70 by the time the merger is finalized).
No matter which way it goes, Bay will have been a disaster holding for the 12 months prior to the close. As a further comparison,it will be the same price the company was when it moved to the NYSE 3 years ago. All in all, a good trading stock if you timed it right; a terrible buy and hold investment since 1993.
I do not believe we have a better option on the immediate horizen that this NT buyout. However, it still requires Bay to deliver its numbers even after the merger or our new NT shares won't be worth spit. This deal does not let House or the rest of his mgmt team off the hook. It just provides a cushion in the short term for the plan he espouses to come to fruition. If his IP strategy is wrong(or is the betamax to ATM's VHS), then we and NT will suffer. I don't know one way or the other, but I do recognize the risk going forward even with the merger.
Paul |
