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

To: Steve Fancy who wrote (14492)	11/12/1999 5:30:00 PM
From: Elmer Flugum	Respond to of 18016

Ericsson eyes Newbridge Networks cbs.marketwatch.com KANATA, ONTARIO (CBS.MW) -- Shares of Newbridge Networks climbed 8 percent Friday after the Toronto Globe & Mail reported that Sweden's telecommunications giant Ericsson commenced due diligence in hopes of acquiring the company. "Talks of an acquisition of Newbridge have been going on for years," said analyst Chandan Sarkar of Soundview reported that Ericsson and Newbridge were in takeover talks over the summer. Shares of Newbridge rose 2 3/8 to 20 5/8 on a volume of 9.1 million shares--nearly seven times its average daily volume over the past three months. Ericsson fell 1/4 to 45 1/2. Newbridge manufactures digital networking gear such as ATM (asynchronous transfer mode) switches for high-speed multimedia transmissions over telephone and data networks as well as wireless and satellite access products, and internetworking tools. Its products are used by major telecom companies worldwide -- including AT&T and MCI WorldCom -- as well as Internet service providers. "There's literally seven or eight companies that could be interested in acquiring Newbridge." said analyst Michael Cristinziano of Gerard, Klauer, Mattison & Co. "Unfortunately, their track record with respect to execution leaves much to be desired. They are notorious for missing (earnings projections for) quarters" he commented. Sarkar added that any large company that has products in the voice market could be a Newbridge suitor. "Any large voice player without a data offering, that is a packet switching system that carries voice as opposed to data, could be a candidate." Sarkar visited Newbridge two days ago and came away with the impression that "they would go at the right price, but their right price is very high and they would rather build up their business in the next few months." Newbridge has some products that are in beta testing or will be launched soon which could change the terms of any prospective acquisition. "You can talk about who wants to acquire the company, but there's nothing like having customers that want a product and are willing to pay for it." said Cristinziano who believes that successful product launches could make them a more attractive buy and also drive the purchase price upward. The analysts believe that Newbridge will be acquired at a peemium to investors, partially because the company's CEO Terence Matthews owns 22 percent of the company and will not part easily with his shares. "In effect, he has veto power over any future takeover bid." said Sarkar who added "I have a feeling that they will be acquired (by someone) but not when the market thinks they will be....probably in the middle of next year." Ericsson's vice president of communications Kathy Egan stated "there is no basis for this rumor." Newbridge could not be reached for a comment. Dow Jones reported Friday that Newbridge said the company is not in takeover talks with Ericsson, but confirmed talks with France's Alcatel.

To: Steve Fancy who wrote (14492)	11/12/1999 5:36:00 PM
From: Bob Howarth	Respond to of 18016

Yes, Terrence Mathews. I think the following quote from just out news is probably accurate. "Sarkar visited Newbridge two days ago and came away with the impression that "they would go at the right price, but their right price is very high and they would rather build up their business in the next few months." I believe that Ericson could NOW actually offer 1 ADR (around 44) per NN share and not face earnings dilution, given a buck per share in NN over next 4 quarters. I am trying to use Value Line for the Ericson numbers and am guessing a bit due to multiple classes of shares.