Date: Sun, 2 Aug 1998 20:30:23 -0700 (PDT)
From: "Quote.Com Staff" <staff@quote.com>
To: quotecom-users@news.quote.com
Reply-To: staff@quote.com
Subject: Ascend set to announce Stratus acquisition
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News Alert from Reuters via Quote.com
Topic: (NASDAQ:ASND) Ascend Communications Inc, (NYSE:SRA) Stratus Computer,
(NYSE:LU) Lucent Technologies Inc, (NASDAQ:SUMA) Summa Four, (NASDAQ:CSCO) Cisco
Sys Inc, (TSE:NTL) Northern Telecom Ltd., (NYSE:BAY) Bay Networks Inc,
Quote.com News Item #7250116
Headline: Ascend set to announce Stratus acquisition
======================================================================
By Robin Sidel
NEW YORK, Aug 2 (Reuters) - Internet equipment supplier
Ascend Communications Inc. (NASDAQ:ASND) is expected to announce
plans early on Monday to buy Stratus Computer Inc. (NYSE:SRA) for
less than $1 billion in stock, according to sources familiar
with the transaction.
Board of both companies met Sunday, but final details were
still being hammered out late Sunday night, said the sources
who did not want to be identified.
Financial terms of the transaction could not be determined
late Sunday.
The sources said the deal calls for Marlboro, Mass.-based
Stratus to be split into four parts, with Ascend retaining the
key portion of the business that makes computers used to run
telephone switching systems. Other Stratus operations, which
are used in securities trading and electronic commerce, would
likely be sold by Ascend as part of the transaction.
The San Jose Mercury News was first to report news of the
transaction on Friday. Sources later confirmed the talks to
Reuters.
Shares of Alameda, Calif.-based Ascend tumbled sharply on
Friday on concerns that the Stratus deal could jeopardize a
potential purchase of Ascend by telephone equipment giant
Lucent Technologies Inc. (NYSE:LU) .
Rumors of an Ascend-Lucent transaction have circulated for
months and industry experts have speculated that a deal could
be coming this fall.
Ascend shares closed Friday at $44.875 on Nasdaq, down
$7.06. Stratus stock gained 44 cents to $28.75 on the New York
Stock Exchange.
The deal will mark the latest in a wave of transactions in
the telecommunications equipment sector. Companies are racing
to outfit the world's telecommunications networks so they can
transmit both phone calls and data communications over the
Internet.
Analysts said Friday a transaction between Ascend and
Stratus would be a strategic coup for Ascend. Furthermore,
Stratus' share price has fallen sharply in recent months due to
weak sales, a development that makes the acquisition a better
bargain for Ascend.
Other similar transactions include the planned acquisition
of Summa Four Inc. (NASDAQ:SUMA) by Ascend competitor Cisco Systems
Inc. (NASDAQ:CSCO). In June, Canada's Northern Telecom Ltd (TSE:NTL)
agreed to buy Bay Networks Inc. (NYSE:BAY)
Copyright 1998, Reuters News Service
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