Newbridge stock drops despite more rumors
TORONTO, Nov 20 (Reuters) - Newbridge Networks Corp.
stock dropped on Friday despite more talk that
U.S.-based Lucent Technologies Inc. was poised to
acquire a stake in the telecommunications and networkingcompany.
Rumors that Lucent was taking a 15 percent equity block in
Kanata, Ontario-based Newbridge failed to bolster its share
price, which fell C$1.75 to C$38.60 on the Toronto StockExchange.
The drop comes after a week of strong gains on the back of
similar speculation. Newbridge opened at C$32.40 on November17.
In New York the stock fell $1 to $25.13 on Friday.
Newbridge, which did not return telephone calls, had
dismissed rumors of takeovers or major contracts in newsreports.
The Lucent speculation, which has been around for months,
could have been a factor in recent gains, said Duncan Stewart,
portfolio manager at Tera Capital.
"The rumor on the street is that it's Lucent and
Newbridge," Stewart said. "It's just a rumor but I'm attaching
some credence to it ... because it makes lots of sense."
Stewart believes that the companies would make a good fit,
given the fact that Lucent could benefit from Newbridge's
strong presence in the (asynchronous transfer mode) ATM market.
Another analyst disagreed, saying that if Newbridge linked
up with Lucent it would lose its partnership with Germany'sSiemens AG .
"I think the odds of Lucent buying Newbridge are very, very
low," he said. If a deal occurred, rival Siemens would likely
break off contact and Newbridge would lose the sales thatSiemens brings in.
Instead, Lucent, which has been expected to make a big
acquisition for a while, is more likely to match up with Ascend
Communications Inc. , the analyst said. ($1 = $1.54 Canadian) (m)) |
