A spokesman for Tellabs, located in Lisle, Ill., declined to comment, citing a quiet period related to the merger agreement between Tellabs and Ciena, which has headquarters in Linthicum, Md. Ciena did not respond to a request for comment.
If the merger isn't scheduled to be completed until mid-November, does that mean CIEN/TLAB won't have anything to say in their defense for 2 months? Give me a break. What a lame excuse. If this company can't open their mouth and comment for 2 months because of a quiet period, then I'm afraid single digits are on the way.
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Did anyone else see on the wires that another bidder has appeared to compete with Tellabs? Word on the street says that AFCI will offer 0.80 AFCI shares for every CIEN share. My contacts tell me that after the companies merge the ticker will be AFCIEN. I am also told that AFCI will do a $200 million convertible preferred private placement to raise money so they can pay TLAB the break-up fee. AFCI management was quoted as saying, "This floorless convertible will only cause minor dilution to our current shareholders. We calculate that at current market prices the preferred will be convertible into approx 35 million common shares. However, there is no guarantee as to the potential dilution if the market price of our stock should fall. Potential dilution could reach the 75-80 million share range."
P.S. In case anyone was wondering where AFCI closed, it closed at 6 3/4. That puts CIEN at $5.80/share before the spread, and it will be quite a large spread like the current CIEN/TLAB one because the new deal won't be voted on until mid-November 1999. AFCiena says it will be in a quiet period for the next 14 months and won't be able to respond to speculation about it's business.
I think I see a bid of $3 on instinet for CIEN. AFCI is reportedly trading at 5, down from a close of 6 3/4. |
