Tim,
Here is my take on CIEN at the moment. CIEN does not want to do a deal. In fact, they were the pursued last time around. But, Nettles wishes aside, money talks and shareholders and CIEN probably need a deal.
I think that everyone knew LU was going to go after someone. In fact most thought correctly that it would be ASND. Now that the cards begin to fall it is time for the balance of the power brokers in telecom to start moving forward with their own plans.
I assume CIEN is on several radar screens. Forget all the crap about corporate HQ locations, that's what CSCO likes to say in defense, forget the corporate culture crap, TLAB mentioned this as a challenge, and forget the deals that fell through and the free fall in price of 6 months ago. Think only about the following:
IMO, the first guy to move on CIEN has to know what he is willing to pay, as well as, how far or rich he can make the deal for someone else if they lose. Also, I think the big U.S. boys are also having a difficult time trying to determine the interest from Europe.
Deal works like this. I want CIEN. However, I know there is a momentum beginning that is going to consolidate the industry. I am concerned about TLAB, because of past deal and friendly breakup, I am concerned about CSCO because of partnering activities to win big deals, and I am thinking about Erickson who wants in this market badly.
How do I go after CIEN without setting off a bidding war, which is probably going to happen anyway so I better know my limits when I get started. At the same time if a bidding war starts out how can I make certain that the eventual winner, if it is not me at my deal, pays up full boat for CIEN and potentially gets distracted in trying to do the deal. Also, at the same time perhaps they dilute their shares to the point that my comptetion's appetite for acquistions get filled for a while. This would then allow me to work on another opportunity to find a dance partner.
What all this means to me and the reason I am long several thousand shares is that CIEN will see $40+ in any deal. I believe the deal will be within the next Q. |
