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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: FR1 who wrote (12039)	7/26/2000 5:50:35 PM
From: Peter Sherman	Read Replies (1) \| Respond to of 24042

sure - it is the 23 or so per cent arb discount - representing the idea that the deal blows up or is stopped by the feds... in that case, SDLI drops like a rock - so, the difference is the risk you take when you own SDLI - EZ

To: FR1 who wrote (12039)	7/26/2000 5:54:22 PM
From: allen menglin chen	Read Replies (1) \| Respond to of 24042

Some rumor today that SDLI/JDSU deal won't get thru. So JDSU's 50% SDLI premium is highly discounted.

To: FR1 who wrote (12039)	7/26/2000 6:38:40 PM
From: SJS	Respond to of 24042

YOu got it all. That's the risk of the deal not going through. Welcome to arb 101.

To: FR1 who wrote (12039)	7/26/2000 8:40:50 PM
From: brightlake2	Respond to of 24042

SDLI price It is based on JDSU's price and has a 15% discount from the onset. The market is valuating JDSU at $117 per share, if SDLI is worth $385 (117=385/3.8*1.15). If JDSU does not gap down tomorrow, look for SDLI to rally 5% at least in the recent future. That is about $20 a share. Not bad for a short term trade. The worst discount ETEK had was about 29%, in the heat of market correction. It tends to fluctuate between 10-20%. Since SDLI is a customer of JDSU whereas ETEK was mostly a competitor, SDLI merge should be approved, although they may have to divest some parts of the company. The fact that Nortel has a component business worth north of 100 billion dollars and similar amount for Lucent's, is good for the merger. jmho.

To: FR1 who wrote (12039)	7/27/2000 6:41:51 AM
From: Tecinvestor	Respond to of 24042

Franz, between now and the time the DOJ either approves or disapproves the JDSU/ETEK merger, you will hear a variety of comments and reports, from time to time, many of which are unreliable, and many of which will cause significant swings in the discount at which SDLI is trading vis-a-vis JDSU. For instance, shortly before the DOJ approved the ETEK acquisition, there was some negative news that came out suggesting that the deal would be blocked by the DOJ. The gap between what ETEK was selling for and what JDSU was selling for promptly widened. Then, the DOJ made the announcement that the merger would be approved and the spread evaporated in a matter of days. I believe much of the news that was disseminated during that period was intentionally misleading in order to increase the spread. You can do very well during this period, working the arbitrage play, by moving back and forth between JDSU and SDLI. If you are convinced that the JDSU/SDLI merger will be approved, and you guess right, you can take advantage of both the good and the bad news, during which time the spread will adjust measurably. Personally, I was always convinced the ETEK deal would be approved by the DOJ and everything I had heard, of a reliable nature, led me to that conclusion. Consequently, I was able to do well with respect to the arbitrage play, moving repeatedly between JDSU and ETEK during the relevant period. However, I am not so certain the JDSU/SDLI deal will be approved by the DOJ. We are starting to hear more reliable comments that suggest, to me, that this deal is not the slam dunk that ETEK was. Personally, if I were to bet on the likelihood of DOJ approval at this time, I would say that, presently, there are some indications that we have a tough road to hoe. The present discount between JDSU and SDLI, which has now expanded, will most assuredly shrink, and expand, repeatedly, and significantly, before we know, for sure, what the DOJ will do. JMHO. Tecinvestor