Tellabs to buy Ciena for $4.7 bln stock
-USA Today
Asia, Russia all down...next week I predict we'll see black Monday..
stay away from gold, we'll see new lows...
-MoneyMade
NEW YORK, Aug 28 (Reuters) - Tellabs Inc (TLAB - news) has
agreed to buy fellow telecommunications-equipment maker Ciena
Corp (CIEN - news) in a $4.7 billion stock deal expected to be
announced on Friday, USA Today reported.
Under terms of the renegotiated transaction, approved by both companies' boards on Thursday, Tellabs
will swap 0.8 shares for each outstanding Ciena share, executives close to the deal told the newspaper.
The deal values Ciena shares at $46.25 based on Thursday's Tellabs close. Both companies declined
comment.
In structuring a new agreement, the pair hope to end a painfully turbulent period in their stock
valuations, the newspaper reported.
Ciena's market value has plunged by more than two-thirds from a record $92- a month ago, while
Tellabs has lost about a third of its value.
Ciena's share price almost halved in frenzied trading last Friday when it failed to get a lucrative
contract from AT&T (T - news).
Both sides recognised their original 1-for-1 stock swap, valued at $6.9 billion when first announced in
June, would have to be reworked, the newspaper said.
Ciena dropped 3-7/16 on Thursday to $30-13/16, its lowest close since May 1997, on worries that a
deal would not be reached. Tellabs fell 11/16 to $57-13/16.
After a hastily arranged meeting with his board in Chicago on Tuesday, Tellabs chief executive
Michael Birck flew to Washington the next day to meet Ciena chief executive Patrick Nettles.
By late night, the two men, along with Tellabs bankers Goldman Sachs and Ciena advisers Morgan
Stanley, had a new deal, USA Today reported.
|
