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

To: Tunica Albuginea who wrote (17298)	2/18/2000 9:16:00 PM
From: Tunica Albuginea	Read Replies (2) \| Respond to of 18016

CNET.COM:ÿ Alcatel may buy Newbridge Networks .Announcement as early as Tuesday. ÿThe source close to Newbridge said Alcatel's current offer on the tableÿ is "significantly higher" than the company's current stock price. The source said Terrence Matthews, Newbridge's chief executive, ÿtalked about a potential takeover two weeks ago. ÿ "Heÿ told associates that he likes the price, and ifÿ he likes the price,ÿ they'll like the price,"ÿ TA ----------------------------- ----------------------------- ÿÿÿ yahoo.cnet.com ÿ Alcatel may buy Newbridge Networksÿ ÿÿÿ By Wylie Wong ÿÿÿ Staff Writer, CNET News.com ÿÿÿ February 18, 2000, 2:45 p.m. PTÿ ÿÿÿ French phone equipment maker Alcatel is in serious discussions to purchaseÿ ÿÿÿ Canadian networking firm Newbridge Networks, ÿÿÿ sources say.ÿ ÿÿÿÿ A deal--worth more than $6 billion--could be announced as early as Tuesdayÿ ÿÿÿÿ when Newbridge reports its quarterly earnings,ÿ ÿÿÿÿÿ ÿÿÿÿ sources withinÿ Newbridge said today.ÿ ÿÿÿ "There's no completed deal yet, and until then, anything can happen ÿÿÿÿ and there's nothing to announce," said the source, who added that ÿÿÿ negotiations could last beyond Tuesday.ÿ ÿÿÿ "But it looks like we had a good quarter,ÿ and to a suitor, that has to look good. ÿÿÿ And if it doesn't work out, we're willing to stay independent and ÿÿÿ willing to build ourselves back as a company on the rebound."ÿ ÿÿÿ Alcatel and Newbridge representatives declined comment on the potential takeover.ÿ ÿÿÿ Newbridge, which has financially struggled lately, has discussed buyouts withÿ ÿÿÿ several companies in the last few months, ÿÿÿ the source said. The source declined to name the suitors.ÿ ÿÿÿ Published reports have speculated that Germany's Siemens and Sweden's Ericsson ÿÿÿÿ have been among the companies interested.ÿ ÿÿÿ ÿSimilar to those firms, Alcatel would be interested in Newbridge because ÿ the company has developed a set of high-end ÿ Internet-based equipment for voice and data traffic--something the ÿ French phone equipment maker lacks.ÿ ÿ ÿThe source close to Newbridge said Alcatel's current offer on the tableÿ ÿÿ is "significantly higher" than the company's ÿÿ current stock price. Newbridge currently has a market value of $5.9 billion.ÿ ÿThe source said Terrence Matthews, Newbridge's chief executive,ÿ ÿÿ talked about a potential takeover two weeks ago. ÿ "He told associates that he likes the price, and if he likes the price,ÿ ÿÿ they'll like the price,"ÿ the source said.ÿ ÿÿ For Alcatel, buying Newbridge will help it in its quest to tackle ÿÿ the North American market. The French phone equipment ÿÿ maker is one of several international companies hoping to compete ÿÿ against domestic leaders like Cisco Systems, ÿÿ Lucent Technologies and Nortel Networks in supplying serviceÿ ÿÿÿ providers and businesses the equipment they need to ÿÿ build faster networks.ÿ ÿÿÿ For Newbridge, a one-time leader in the networking market, theÿ ÿÿÿ acquisition will end several years of executive turnover and financial struggles. ÿÿÿ The company has had seven profit warnings in the last three years.ÿ ÿÿÿÿ "Alcatel would rescue them from the wrenches of volatile management,ÿ ÿÿÿ lack of focus and lack of money," Cahners In-Stat Group analyst Laurie ÿÿÿ Gooding said.ÿ "They've got great products. Customers like them, butÿ ÿÿÿ they can't seem to get their act together."ÿ ÿÿÿ Newbridge builds asynchronous transfer mode (ATM) technology, which sendsÿ ÿÿÿ voice and data signals over networks at high speeds. The ÿÿÿ company sells ATM-based high-speed routers and is developing products in the ÿÿÿ emerging high-speed Internet access market, including digital ÿÿÿ subscriber line (DSL) technology.ÿ ÿÿÿ Since November, Newbridge's shares have jumped from about $20 to about $35 ÿÿÿ as investors speculated that a buyout was imminent.ÿ ÿÿÿ Newbridge executives in mid-November said the company would be open to ÿÿÿ a takeover after it announced a restructuring that included cutting ÿÿÿ about 700 employees, or 10 percent of the work force, and plans to outsource itsÿ ÿÿÿ manufacturing and customer service operations to cut costs.ÿ ÿÿÿ Alcatel has invested heavily in the past year to enter the North American market. Alcatel hasÿ ÿÿÿ spent about $7 billion the last two years to acquire ÿÿÿ five U.S.-based networking companies, including Xylan, Packet Engines and Internet Devices. ÿÿÿ The company also recently created a $150 million ÿÿÿ investment fund to invest in U.S.-based start-ups.ÿ