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

To: Bob Howarth who wrote (14466)	11/12/1999 9:34:00 AM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 18016

Bob Howarth:Golden Oldies: FORBES: ERICY buying NN ( love the news: 100%of my Canadian RRSP is in NN stock for years !!!!!!) forbes.com July 29, 1999 Archives One Week View Newbridge Networks: Next on the auction block By Om Malik SILICON VALLEY. 02:10 PM EDT¢European telecommunication equipment companies, feeling left behind their American counterparts, are opening their checkbooks and looking to snap up some North American networking hardware makers. Alcatel of France acquired Xylan for $2 billion while General Electric Company of U.K. acquired Fore Systems for about $4.5 billion. Now the word is that the latest company to go on the auction block is Newbridge Networks of Kanata, Ontario. Sources familiar with the company say that Newbridge is in talks with Ericsson of Sweden, a deal that could be announced as soon as Monday. However, when contacted by Forbes.com, Newbridge spokesperson Chris Fox said: "We are not in active negotiations." Fox dismissed the deal as rumor. Nevertheless, the teams from two companies are said to be holed up in Washington, D.C., hammering out the terms of the agreement. The meetings have been going on for almost a week now. The deal is said to net Newbridge shareholders over $30 a share, making this a $5 billion-plus merger. Newbridge Networks has 178.6 million shares outstanding, with Chairman and Chief Executive Terrence Mathews owning about 25% of the company. Newbridge did not respond to calls before press time. Newbridge started off building analog switches but now has diversified into digital networking products for companies like British Telecom and Cable & Wireless. Newbridge is also formidable in the ATM (asynchronous transfer mode) equipment business, and ATM represented more than 60% of Newbridge's $1.1 billion (U.S.) total revenues in the second half of fiscal 1998. In addition, the company has invested in several startups that are known as Newbridge Affiliates and will add to the overall appeal of the company. Most of these startups are involved in developing advanced networking technologies. Newbridge Affiliates boasts a stable of 20 companies, with some 1,500 employees. The parent company says the affiliate companies "have a combined annual revenue greater than $200 million." The Newbridge-Ericsson merger would be the latest in the high profile unions that are sweeping the data networking business. In 1998, Canadian giant Northern Telecom (nyse: NT) snapped up Bay Networks for $9 billion, and then Lucent Technologies (nyse: LU) scooped up Ascend Communications (nasdaq: ASND) for almost $20 billion. And there are the scores of small acquisitions made by the networking giants. Most of these companies are playing catchup with Cisco Systems (nasdaq: CSCO), clearly the leader in the Internet Protocol-based networking equipment. The demand for the IP-based networking equipment is growing at a breakneck speed, outpacing the demand for the voice-related equipment. European hardware vendors have been slow to wake up to this market and are also playing catchup. European vendors such as Alcatel, Siemens, Ericsson and Nokia wised up to the data-networking trend too late and are thus snapping up second-tier data-networking hardware companies. Analysts believe that the only independent company left after the possible Ericsson-Newbridge Networks deal will be Cabletron Systems (nyse: CS)