Cabletron up on buyout talk
By Jeffry Bartash, CBS MarketWatch
Last Update: 12:45 PM ET May 19, 1999
ROCHESTER, NH (CBS.MW) -- Shares of telecommunications equipment maker Cabletron Systems leaped 8 percent Wednesday, touching their highest level since December, amid renewed takeover talk.
The manufacturer's shares (CS: news, msgs) climbed 1 to 13 9/16, the highest since it closed at 13 11/16 on Dec. 2.
Cabletron has been moving up since mid-April on speculation that the company could be bought out, most likely by a European manufacturer seeking a bigger footprint in the key U.S. market.
Merger talk intensified after Chief Executive Craig Benson said earlier in May that he's considering selling off certain operations. Many analysts and investors saw those statements as the equivalent of a for-sale sign. Benson is the company's co-founder and majority shareholder.
Cabletron, whose stock traded as high as 46 1/2 two years ago, has struggled to keep up with much-larger rivals Lucent Technologies, Cisco Systems and others. And with the number of major U.S. equipment suppliers dwindling, speculation is rife that several European concerns will move soon to snap up the largest second-tier targets remaining.
Among possible suitors, analysts say, is Alcatel of France or Siemens of Germany. Another company once considered a possibility, General Electric of Britain, recently agreed to acquire Fore Systems (FORE: news, msgs). While that might seem to preclude a Cabletron purchase, analysts believe GEC is still on the prowl.
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