Gary,
you are neglecting the most obvious of points. A Coherent "blow-up" did not cause its initially large spread. These two deals bear very little similarity at this point.
You seem to have missed the point of my post. I think the two deals are indeed now similar insofar as there was/is a lack of arb long/short positioning (for different reasons, to be sure), which, were it occurring, would tend to tie the stock prices together.
The other item that spooks me right now is the silence from TLAB. What do you make of this? I have a hard time persuading myself that this is a good thing.
I didn't see TLAB commenting about the Coherent spread. Anyway, I guess TLAB could fiddle with the purchase price a little bit, but not much. At .8, that is 36 for CIEN, which is about 10x sales. LU paid 8x sales for Livingston. Maybe you could argue for .75, which is more like 8x sales. But there is another company (Company A) that is/was interested in CIEN, so that justifies not fiddling too much, I think.
Best,
Gary Korn |
