Ciena Shares Rise on Speculation of Takeover Offer (Update1) (Updates with closing share activity.)
Linthicum, Maryland, Jan. 22 (Bloomberg) -- Shares of Ciena Corp., the top maker of equipment used to boost capacity on telephone networks, rose 23 percent amid speculation the company could be an acquisition target for a larger phone-equipment maker, analysts said.
Shares rose 4 3/16 to 22 9/16 in trading of 18.2 million, making it the seventh most actively traded stock in U.S. markets. Earlier, the shares touched 23, their highest since September.
Investors have speculated larger equipment makers, like Alcatel SA of France or Northern Telecom Ltd. of Canada, would Ciena to get the company's technology for the fast-growing market to boost capacity on phone networks, analysts said. Ciena shares have dropped from a record 92 3/8 in July after Tellabs Inc. scrapped its plan to buy the company for as much as $7 billion. ''Ciena's technology is one of the most attractive areas in the market,'' said Ken Leon, an analyst at ABN Amro Inc., who rates Ciena ''hold.'' ''Ciena would benefit by being partnered by a larger global supplier.''
Some investors are also speculating Ciena may be set to announce several new contracts, analysts said.
Ciena, Northern Telecom and Alcatel officials weren't immediately available to comment.
Trading of Ciena options was active as well. Contracts to buy Ciena shares at 22 1/2 expiring Feb. 20 rose 1 7/8 to 2 3/4 in trading of 4,300, more than eight times the daily average.
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