3Com Shares Rise on Speculation of Buyout, Possible Unit Sales
Bloomberg - 4/23 12:50
Santa Clara, California, April 23 (Bloomberg) -- 3Com Corp. shares
rose as much as 21 percent amid speculation that the No. 2 networking
company may sell off some of its less-profitable businesses or
be acquired by a large phone-equipment maker.
3Com rose 4 to 26 5/16 in early afternoon trading of 20.6 million
shares, making it the second-most active stock in U.S. markets.
Earlier, the shares touched 27.
3Com's stock has plunged more than 40 percent this year as falling
prices on the company's PalmPilot hand-held computers and low-cost
modems and connector cards hurt sales. 3Com Chief Executive Eric
Benhamou last week unveiled a minor reorganization as part of a plan
to target faster-growth markets. ''They need a major reorganization,''
said William Becklean, an analyst with Tucker Anthony Inc. who rates
3Com ''market perform.''
The company's markets have slowed significantly and its product line is
thin, said Becklean and another analyst. ''It would make sense for
them to sell off some businesses,'' said Erik Suppiger, an analyst at
Hambrecht & Quist who doesn't yet rate the stock.
The company also could be an acquisition target for a large European
phone-equipment maker like Ericsson AB or Siemens AG, which have said
they're looking to acquire more networking companies.
''3Com has technology that a lot of those (phone-equipment companies)
want,'' said Esmeralda Silva, an analyst with market researcher
Forrester Research.
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