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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (1355)	3/2/2000 5:52:00 PM
From: Kevin Linder	Read Replies (2) \| Respond to of 1989

Lynn; I was kind of speculating along a similar idea about two or three months ago -- I don;t remember whether I posted my thoughts or not, but there might be some advantages to a merger between VRTS and SEG. I think Cramer might be missing something here. The advantages I thought might happen were that: 1) VRTS is trading at a substantial premium to assets and a high p/e multiple. SEG has real assets that are undervalued and could be combined with VRTS for a more "substantial" company. 2) Shares currently owned by SEG would become Treasury shares and "treasury" shares are not counted in the price earnings multiples (accounting help here?). 3) Wall Street appreciates Software stocks yet underappreciates drive stocks -- would there be really much of a management change with a merger? Doubtful, SEG's board will have a significant voice in any merger...They control a third of VRTS stock and the market value of SEG is about $11 billion. Potentially a close merger of equals yet a horse of a different color... 4) The resulting Treasury shares could be sold by the "new SEG/VRTS." This would bring in a load of cash and increase assets of the combined company. (I am not sure, but it seems to me that there may be some way to avoid a capital gain by redeeming these shares and then eventually re-issuing more stock.) All in all, I don't think it is that far fetched and there could be many potential advantages. It just depends on how SEG management intends to "unlock" the value of SEG shares and assets... Kevin Linder