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

To: James Calladine who wrote (17295)	2/18/2000 8:47:00 PM
From: James Calladine	Read Replies (1) \| Respond to of 18016

FROM BLOOMBERG(POSSIBLE DUPLICATE) <<<Alcatel's Purchase of Newbridge May Come Next Week (Update2) By Erik Schatzker Alcatel's Purchase of Newbridge May Come Next Week (Update2) (Closes shares.) Paris, Feb. 18 (Bloomberg) -- Alcatel SA, Europe's No. 2 phone-equipment maker, may announce by Wednesday that it will buy Newbridge Networks Corp., a person familiar with the companies' plans said. Newbridge, a Canadian phone-equipment maker that put itself up for sale in November, may fetch about $40 a share, or $7.33 billion, Chase H&Q analyst Mike Neiberg said. The companies are haggling over price, and Ericsson AB or Siemens AG, which have talked with Newbridge, could step forward as partners if talks fail, the person said. The companies want to wrap up the agreement before Newbridge shares begin trading on Wednesday, the person said. Newbridge, which reports earnings late Tuesday, has told analysts that it could beat forecasts of 11 cents a share. That could lift the stock and make a purchase more expensive for Alcatel. ``Alcatel would probably be happy to see Newbridge stock go up a bit to dispel the notion that what they're buying is damaged,' said analyst Jim Kedersha of SG Cowen. ``But not too much because they'd have to pay more.' Newbridge, Alcatel and Ericsson officials declined to comment. Siemens spokesman Peter Gottal said the company isn't in talks with Newbridge. Alcatel's negotiations with Newbridge were reported by the Globe and Mail and the Wall Street Journal. Newbridge shares fell 2 1/2 to 32 7/8 in New York Stock Exchange trading. They've risen 46 percent this year on speculation of a sale. Alcatel fell 4 3/16 to 47 3/8. Alcatel's Spree Alcatel has spent $8.5 billion in the past 17 months to add equipment and software for data networking and Internet access. Still, the Paris company is lagging in sales to North American phone companies, which prefer the asynchronous transfer mode, or ATM, switches that Newbridge, Lucent Technologies Inc., Cisco Systems Inc. and Nortel Networks Corp. sell. Newbridge would give Alcatel the ATM switches, which deliver voice, data and video on a single network, as well as customers such as SBC Communications Inc. and Cable & Wireless Plc. ``The Europeans are behind the North Americans in this market,' Neiberg said. ``They need to make an acquisition to get in and Newbridge is the only major target left.' Newbridge founder Terry Matthews, who also is chairman and chief executive, put the company on the block on Nov. 18 after warning in six of the past nine quarters that earnings would fall short of analyst forecasts and losing market share to Lucent. Tellabs Inc. held preliminary talks to buy Newbridge in March. Those discussions fell through. Some analysts were skeptical that Newbridge will do much to improve Alcatel's business, because the industry is moving to networks that run on Internet-based technology. ``Newbridge would give them a great position in the ATM market, but it's a short-term fix,' said analyst Eric Burkel of Handelsbanken Markets. >>>