Petz and thread
Intel makes another purchase...this time, a company that designs communication chips for the optical networking market.
____________________________________________________________
Giga deal with Intel dusts up NKT prospects
By Peter Starck
COPENHAGEN, March 15 (Reuters) - Danish NKT <NKTC.CO>, a maker of wares as diverse as vacuum cleaners and communication chips, on Wednesday sold its Giga high-tech unit at a price double the whole group's market value.
U.S. Intel Corp. <INTC.O> agreed to buy NKT's 63-percent owned Giga subsidiary in an all-cash 9.4 billion crown ($1.25 billion) deal worth almost 50 times Giga's 1999 turnover and 92 times earnings.
Analysts said the sales price far exceeded their estimates of Giga's value.
NKT, which saw operating earnings slump by 1.1 billion crowns in 1999 to a 533 million crown loss, revised its full-year 2000 forecast to a profit of 4.5 billion crowns from an earlier forecast of an up to 175 million crown loss.
"We got a price which I don't think we could have achieved any other way," NKT CEO-elect Tom Knudsen told Reuters by telephone, referring to recent market talk NKT might float Giga.
NKT's share soared 46 percent to a life-high of 1,300 crowns when the Copenhagen Stock Exchange opened. But by 1420 GMT it had given up some of its hefty gains to trade 24.7 percent up for the day at 1,110 crowns.
Giga, established in 1998, specialises in the design of advanced high-speed communication chips used in optical networking. It is a leading maker of chips used in products directing Internet traffic, Intel said in a statement.
EXPLOSIVE INTERNET GROWTH BEHIND GIGA BUY
The acquisition targeted the market segment for high-performance networking chips which accommodate the rapidly expanding use of fiber-optics needed to support "the explosive growth of the Internet," Intel said.
NKT said it would pocket an after-tax one-off gain of 4.6 billion crowns on the disposal.
At Tuesday's close, following an 85 percent rise in NKT's share price over the past week, the group's market value was 4.8 billion crowns, according to Reuters 3000 data.
"It is interesting and also surprising that the U.S. growth stock valuations we see on the Nasdaq can actually be realised here in the Nordic region," Handelsbanken Markets analyst Robert Gaertner told Reuters.
Analysts said they would upgrade estimated valuations on NKT's other high-tech units, primarily Ionas and Nordic Superconductor Technologies (NST).
One analysts, speaking on condition of anonymity, pointed out that neither Ionas -- a maker of advanced integrated optical components -- nor NST had reached the same stage of maturity as Giga.
"This poses the question: What else does NKT have to offer? Cables and vacuum cleaners. They lack something 'sexy' in the interim (until Ionas and NST mature)," the analyst said.
NKT said it had not yet decided how to channel the Giga disposal gain back to shareholders. Knudsen noted that the group had earlier employed share buy-back schemes for that purpose.
Analysts expected NKT to use some of the proceeds for acquisitions.
Cheered by the Giga jackpot, shares in Danish companies holding stakes in the divested unit or in NKT advanced against the broadly falling stock market trend.
Holding company Dansk Kapitalanlaeg <DKPC.CO> rose 31 percent to 550 crowns, cement maker Aalborg Portland <APACb.CO> added 16 percent to 220 crowns and conglomerate FLS Industries <FLBCb.CO> climbed five percent to 147 crowns.
($=7.7174 Danish crowns)
10:54 03-15-00
Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL.Giga deal with Intel dusts up NKT prospects
By Peter Starck
COPENHAGEN, March 15 (Reuters) - Danish NKT <NKTC.CO>, a maker of wares as diverse as vacuum cleaners and communication chips, on Wednesday sold its Giga high-tech unit at a price double the whole group's market value.
U.S. Intel Corp. <INTC.O> agreed to buy NKT's 63-percent owned Giga subsidiary in an all-cash 9.4 billion crown ($1.25 billion) deal worth almost 50 times Giga's 1999 turnover and 92 times earnings.
Analysts said the sales price far exceeded their estimates of Giga's value.
NKT, which saw operating earnings slump by 1.1 billion crowns in 1999 to a 533 million crown loss, revised its full-year 2000 forecast to a profit of 4.5 billion crowns from an earlier forecast of an up to 175 million crown loss.
"We got a price which I don't think we could have achieved any other way," NKT CEO-elect Tom Knudsen told Reuters by telephone, referring to recent market talk NKT might float Giga.
NKT's share soared 46 percent to a life-high of 1,300 crowns when the Copenhagen Stock Exchange opened. But by 1420 GMT it had given up some of its hefty gains to trade 24.7 percent up for the day at 1,110 crowns.
Giga, established in 1998, specialises in the design of advanced high-speed communication chips used in optical networking. It is a leading maker of chips used in products directing Internet traffic, Intel said in a statement.
EXPLOSIVE INTERNET GROWTH BEHIND GIGA BUY
The acquisition targeted the market segment for high-performance networking chips which accommodate the rapidly expanding use of fiber-optics needed to support "the explosive growth of the Internet," Intel said.
NKT said it would pocket an after-tax one-off gain of 4.6 billion crowns on the disposal.
At Tuesday's close, following an 85 percent rise in NKT's share price over the past week, the group's market value was 4.8 billion crowns, according to Reuters 3000 data.
"It is interesting and also surprising that the U.S. growth stock valuations we see on the Nasdaq can actually be realised here in the Nordic region," Handelsbanken Markets analyst Robert Gaertner told Reuters.
Analysts said they would upgrade estimated valuations on NKT's other high-tech units, primarily Ionas and Nordic Superconductor Technologies (NST).
One analysts, speaking on condition of anonymity, pointed out that neither Ionas -- a maker of advanced integrated optical components -- nor NST had reached the same stage of maturity as Giga.
"This poses the question: What else does NKT have to offer? Cables and vacuum cleaners. They lack something 'sexy' in the interim (until Ionas and NST mature)," the analyst said.
NKT said it had not yet decided how to channel the Giga disposal gain back to shareholders. Knudsen noted that the group had earlier employed share buy-back schemes for that purpose.
Analysts expected NKT to use some of the proceeds for acquisitions.
Cheered by the Giga jackpot, shares in Danish companies holding stakes in the divested unit or in NKT advanced against the broadly falling stock market trend.
Holding company Dansk Kapitalanlaeg <DKPC.CO> rose 31 percent to 550 crowns, cement maker Aalborg Portland <APACb.CO> added 16 percent to 220 crowns and conglomerate FLS Industries <FLBCb.CO> climbed five percent to 147 crowns.
($=7.7174 Danish crowns)
10:54 03-15-00
Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL. |
