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To: Skeeter Bug who wrote (121339)	3/22/2001 7:44:17 PM
From: H James Morris	Respond to of 164684

SB, Morgan Stanley pulled it out! Can you believe it? When MS pulls it out you know its time to buy some waterfront property on the planet Mars! >Published: March 21 2001 19:14GMT \| Last Updated: March 22 2001 22:09GMT Lucent Technologies on Thursday received another setback in its efforts to reduce its high level of debt and raise much needed capital, with the reduction in the price range of its Agere Systems group due to be spun-off next week. In addition, Morgan Stanley Dean Witter, the lead underwriter, has pulled out of a deal to accept 200m Agere shares in exchange for about $2.3bn of Lucent debt. Poor market conditions for technology initial public offerings have forced Lucent, the world's largest telecommunications maker, to revise the price range for its optical components and communications chip business. The price range has been cut in half to between $6 to $7 - the third time the price has been reduced. And the number of shares offered has increased to 600m from 500m. The Agere IPO is central to Lucent's efforts to restructure its operations and return to profitability after missing product cycles in the optical communications equipment business, and stumbling in other markets. The offering would raise about $3.75bn, sharply below the $7bn of the prior price range, which would have made it the second-largest US IPO. Lucent will be able to off-load $2.5bn in debt that will be assumed by Agere. But it will no longer be able to write-off an additional $2.3bn in debt held by Morgan Stanley that was to be paid for with Agere shares. An additional 90m Agere shares will be available if the offering is over-subscribed, potentially raising up to $630m. The deal is expected to be priced sometime next week. But so far, there is has been scant interest in the offering from institutional investors. The valuation of chipmakers and optical components companies such as JDS Uniphase have fallen dramatically over the past six months. Agere relies on Lucent as its top customer and Lucent's troubles could affect demand for Agere's components. However, Agere believes that separating from Lucent will allow it to acquire customers that compete with Lucent. The remaining shares held by Lucent are to be distributed to shareholders by the end of September. But that distribution could be cancelled or changed because of restrictions in the terms of $6.5bn in restructured credit lines.