The perfect merger partner is:
a) Ericson/nok/seimens/alcatel
b) Lucent
c) Intc
Of course the answer is d) all the above - with PALM getting spun off as independent company. Here is why,
Q: Who can most easily afford to buy COMS?
A: LU
While the europeans could establish US based subsidiaries to use stock to do a buyout, LU is in the best position to use its stock as capital to pay the highest prices for COMS. It can use Pooling Interest since that won't be cut off for another year.
Big problem with LU is the ASND transaction has already given them access biz. So they have to unload the access biz.
thats where a) comes in. One of these companies will buy the access biz NOT the whole company b/c they won't be able to pay the price that LU would be willing to pay for the switching biz. The europeans (seimans especially) don't seem willing to shell out the cash for this biz.
LU however might not want the modem, nic and consumer biz. thats where c) comes in. Intc is drooling to be in 3Com's position in the networking biz especially in the consumer end. So they get modem biz, including Analog, DSL and Cable, home connect products (3Com/MSFT home networking products)and NIC biz.
Of course, all the above companies want the PALM business but 3COM mgmt finally does the right thing for shareholders and takes this company public separately.
So, what COMS needs to do is
sell access biz to one of the europeans, cash
sell consumer networking biz to intc, cash/stock
spin off PALM, stock
Sell the remaining biz to LU, stock
All told COMS shareholders get $80 per share with future ownership of (LU, INTC and PALM). Gotta luv it.
Obviously this all takes time to happen...
Just trying to complicate things..
Tim |
