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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: steve susko who wrote (73190)	11/16/1999 7:26:00 PM
From: Tim Luke	Respond to of 90042

Tech Headlines Add to My Yahoo! Tuesday November 16 7:02 PM ET Canada Newbridge to Review Action Plan, Not Offers By Susan Taylor OTTAWA (Reuters) - Despite takover speculation in the media, the board of beleaguered network gear firm Newbridge Networks Corp (NYSE:NN - news). has not been told to expect offers when it meets on Wednesday and Thursday, a spokesman said on Tuesday. The board at that time will review a so-called action plan and the firm's second-quarter results, which will be announced during a conference call with analysts late on Thursday. The plan is designed to address sales problems at Newbridge. Ottawa-area based Newbridge has been labeled a takeover target since issuing its sixth earnings warning in 10 quarters and the resignation of President Alan Lutz on November 2. The board has not been told to expect one to two bids from firms interesting in taking over Newbridge, said spokesman John Lawlor, refuting recent media speculation. Lawlor declined to comment on whether the board will review any offers. ''I haven't indicated that the action plan is a takeover plan -- I've said it's an action plan,'' Lawlor told Reuters. Media reports that suggested Chief Executive Terry Matthews is at odds with a board more inclined to sell the firm than not are false, Lawlor added. ''That's just not the case,'' he said. ''I would describe it frankly as open, forthright discussion among adults.'' Shares in the Ottawa-area based firm declined on Tuesday as recent takeover-fueled gains continued to subside. Newbridge shares dropped C$2.25 on the Toronto Stock Exchange to end the session down 7.6 percent to C$27.25, while on New York the issue lost $1-1/4 to $18-7/8. Some investors are unloading the stock as Newbridge asserts that it is not in discussions with either French telecommunications equipment group Alcatel Alsthom or Swedish telecoms group Ericsson . Those companies are front runners in mounting media speculation that suggests several businesses are preparing bids to buy Newbridge. ''We have had periodic discussions with Ericsson and we have had periodic discussions with Alcatel,'' Lawlor said. ''But we're not currently in discussion with either Alcatel or Ericsson. And certainly not in discussions with either of them regarding a possible takeover of Newbridge.'' The market may also be reacting to the departure of Brian Jervis, the head of Newbridge's switching product group, who left the firm the day after Lutz's resignation was announced, Lawlor said. Jervis led development efforts on a new 50-Gigabit high speed switch, said Patrick Houghton, analyst at Sutro & Co. in San Francisco. That gear is expected to help kick start Newbridge sales. ''When you're about to release a product, to have the person who was skippering that product leave the ship seems like a high risk,'' said Houghton. ''It would certainly raise questions, as it did for me, about the product -- whether it was on track.'' The technology is on track for lab trials within the next few weeks, Lawlor said.