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To: Jim Willie CB who wrote (34279)	7/8/1999 2:57:00 PM
From: Ruffian	Read Replies (1) \| Respond to of 152472

Interesting Twist> 07/08/99 14:23 Predators scent blood as Ericsson sacrifices chief By Alexander Smith, European M&A correspondent LONDON, July 8 (Reuters) - By sacking its chief executive, Swedish telecoms group Ericsson <LMEb.ST> may have handed its rivals a rare takeover opportunity. But there are not many companies that could afford the world's third-largest maker of mobile telephones, which on Wednesday dismissed Sven-Christier Nilsson after just 15 months in charge, investment bankers told Reuters. "You don't get many opportunities like this. But it needs somebody with deep pockets," one said on Thursday. Ericsson has a market capitalisation of around 514 billion Swedish crowns ($60 billion). "Overall it's a big ticket, there are not that many people who can afford it. It is a group that a lot other companies have run their slide-rules over," he added. Persuading the powerful Wallenberg family and its Investor AB investment vehicle either to back a bid or at least remain neutral would be key to the success of any approach. "If somebody with a credible industrial logic approaches, they would listen," a senior banker at a U.S. investment bank, with first-hand knowledge of Sweden, told Reuters. Investor has 22.2 percent of the Ericsson voting rights, with the Wallenbergs controlling a total of 38.8 percent. Another large shareholder, Industrivarden, has 28.1 percent. But the Wallenbergs take a patient approach to their investments and may be willing to give Ericsson the benefit of more time before sanctioning a takeover, the banker added. Some were quick to draw parallels with the situation which prompted one of the most audacious takeovers this decade, Olivetti's <OLIV.MI> corporate raid on its five-times-larger rival Telecom Italia <TIT.MI>. "Now would be a great time to do it. Like (Olivetti's) Colaninno going for Telecom Italia, the (Ericsson) management is wobbling a bit," the banker said. Colaninno made his bid for Telecom Italia only months after the appointment of Franco Bernabe, who was charged with turning the lumbering former state-owned telecoms giant into a leaner, more efficent group able to take on Europe's top players. The vacuum at the top of Ericsson's management team has sent investment bankers scurrying to put together takeover proposals to tempt firms that may long have harboured ambitions to take on the group but lacked the opportunity. Canada's Nortel Networks <NT.TO> and Lucent Technologies <LU.N> of the United States are both possible predators. General Electric <GE.N> and Motorola Inc <MOT.N> might also be tempted to sound out Ericsson's shareholders. Anti-trust concerns could make a bid from Finland's Nokia <NOK1V.HE>, Germany's Siemens <SIEG.F> or France's Alcatel <CGEP.PA> harder to execute, the second banker said. Others said a deal with Internet network equipment maker Cisco Systems Inc <CSCO.N> would make more sense. Shares in Ericsson fell some 10 percent after Nilsson resigned under pressure from the Ericsson board and investors over the slow pace of a restructuring programme. The group is already in the hunt for a new finance director. The stock has gained some 30 percent during the first half of 1999, but has been outshone by Nokia, which has leapt by nearly 70 percent, and U.Sd. ($1=8.540 Swedish Crown) ((European Equities Desk, +44 171 542 7719, fax +44 171 542 3722, email alex.smith@reuters.com)) REUTERS //Begin Meta Data// Selector Code: reutr Copyright 1999, Reuters News Service