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Technology Stocks : Ciena (CIEN)
CIEN 191.61-0.1%Nov 17 4:00 PM EST
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To: Adrew Thanh who wrote (6643)3/2/1999 2:51:00 PM
From: Nevin S.  Read Replies (1) of 12623
 
In many respects, Tellabs/Ciena merger seems to make sense. Tellabs has great products, but it never hurts to flesh out your line when you're competing against the likes of LU and NT. The thought is not that Tellabs and Ciena's product lines create any synergies in an of themselves, but that Tellabs may be in a better position to market Ciena's products given the installed base they currently have. This is where it becomes a win/win for both companies.

Tellabs stock price has recovered from last summer when the last merger attempt failed (for various reason, this possibly being one. And, as a company's stock is their currency, this increases the possibility that TLAB would enter into an agreement to acquire CIEN. More importantly however, is the fact that CIEN's management team has shown demonstrable evidence of a turnaround, which means that TLAB won't get pummeled for attempting a take over this time around.

To answer your 3rd question; Yes I'd take $40/shr from the likes of TLAB or a ratio of .5 TLAB to 1 CIEN (perferably with a floor). The reason is that TLAB is a great company and I'd ride that horse at $75-$80/shr today. And look, then you'd have the best of two worlds; Titan plus Ciena's leading edge DWDM.
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