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Technology Stocks : PairGain Technologies

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To: sandman who wrote (26679)	10/27/1998 12:03:00 AM
From: Rainmaker	Read Replies (1) of 36349

<<The only problem that I have with a merger is that PAIR will probably go for around $12-$15...>> These values present a 40% - 80% premium from todays close and P/E between 18 - 23. This is a steal for a company expected to continue growth at 20% - 30% per year; has sound financials; good products; etc. Regardless, IMO, for a merger to be considered by the Board, we need at least $25 (some Members are seeking at least $32). We can and will be around $25 if the rumors hit the market again and a follow-on deal is announced. This is how I see the market reaction to a PAIR deal should it happen in the near-term. On the leak, PAIR will move like it did in June and peak at say $18. Following the leak with a 30% - 50% premium, fair value would be ($23 - $27). I cite this based on the Ciena/Tellab merger, where Ciena moved up 5 on the rumors the day prior and 6 on announcement the next day to close at 32 (a 50% premium from when the rumors hit the street). We can also look at the Alcatel/DSC deal, where DSC moved from 14 to 19 on the leak and from 19 to 29 on deal announcement the next day.

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