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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: ubrx who wrote (13661)	10/15/1999 8:15:00 AM
From: Rob Riordan	Read Replies (2) \| Respond to of 18016

James - from the SEC filing: We will hold a special meeting of stockholders on Monday, November 15, 1999, at 10:00 a.m., local time, at the Sunnyvale Hilton, 1250 Lakeside Drive, Sunnyvale, California 94086, for the following purposes: Item. 1. to approve the Agreement and Plan of Merger, dated as of June 22, 1999, as amended, between Stanford Telecom, Newbridge and Saturn Acquisition Corp., a subsidiary of Newbridge, which will result in Stanford Telecom becoming a wholly owned subsidiary of Newbridge;

To: ubrx who wrote (13661)	10/15/1999 1:30:00 PM
From: fumble	Read Replies (2) \| Respond to of 18016

According to the SEC filing, the price for STTI is $30 to be paid in NN stock. The price for NN is determined as the average over the 10 day trading period from Oct 25 through Nov 5 (If I read my calendar correctly) - see extract from filing below. As I understand the SEC filing, A low price for NN is good for the STII stockholders because they will receive more NN shares. At the time of the merger agreement, NN essentially gave STII a fixed price bid. (the length of time between the original agreement and now, is a long time. Anything can happen (and did..). NN is protecting the price of $30 promised to STII. (Perhaps they thought that NN stock price would go up instead of down). There is some wiggle room for NN in that if the NN share price drops below $24, then NN can reduce the number of shares given to STII under the $30 formula so that the amount to STII would be less than $30. Assuming that the NN average works out to $22, then according to the formula, the price would be $27.50 for each STII share. This is where Stanford can come in and say that they don't like the deal - NN promised $30 and they want $30. If NN caves and restores the $30, then the deal will go through. If NN resists, then Stanford can either accept the $27.50 (assuming NN=$22), or they can call the deal off. In the case the deal is called off STII may have to pay NN $25m. Also NN may still get a nonexclusive license to all of STII's products. (my reading of this layer of the agreement is a bit fuzzy though). --- SEC text below --- "The exact number of Newbridge shares you will receive in the merger will be determined based on the average closing price of the Newbridge common stock on the NYSE during the 10-day trading period ending on the fifth trading day before the Stanford Telecom special meeting. If the special meeting is adjourned or postponed, the number of Newbridge shares you will receive in the merger will be based on the 10-day trading period ending on the fifth trading day before the date of the adjourned or postponed meeting." "If the average closing price of the Newbridge common stock falls below $24, the exchange ratio will be 1.25, unless Newbridge agrees to increase the exchange ratio so that you will receive Newbridge shares with a value of at least $30 (not including shares issued for the contingent value) for each share of Stanford common stock that you own. If Newbridge does not agree to adjust the exchange ratio, Stanford Telecom will have the right to terminate the merger agreement without completing the merger."