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Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: zbyslaw owczarczyk who wrote (3318)	5/23/2001 12:23:28 AM
From: Steve Fancy	Respond to of 3891

Alcatel and Lucent Approve Extension Of Merger Dialogue Dow Jones Online News, 05/23/2001 00:18 The boards of Alcatel SA and Lucent Technologies Inc. have given the go-ahead for additional discussions that could lead to a $34 billion merger of the two communications-equipment companies, people familiar with the matter told The Wall Street Journal. France's Alcatel (ALA) has proposed acquiring the Murray Hill, N.J., company in a stock-swap deal that doesn't award Lucent (LU) a premium on its current trading price. The two sides for several weeks have been discussing a merger-of-equals structure, with nearly equal stock ownership in the combined entity and equal board representation from both companies. The board meetings were held simply to brief directors on the status of discussions and to elaborate on various details of a potential merger, and no board action was required, according to the people familiar with the matter. That said, the fact that the boards have given the green light for additional discussions and didn't raise major objections is significant, as it shows the talks continue to gather momentum. A major attraction of the deal is the potential for massive cost-cutting, according to those familiar with the situation, who say the companies could realize $4 billion of annual cost savings. The potential for synergies was one of the subjects discussed at the Lucent board meeting, these people say. In addition, Lucent directors discussed issues related to accepting shares of a foreign entity. There was brief discussion to ensure that Alcatel was committed to Bell Labs, the prestigious research and product-development arm of Lucent. A number of issues still need to be resolved before a deal is reached between the two sides, these people warned. The chances of a transaction being consummated are "only slightly better than 50-50," one person familiar with the discussions said. Meanwhile, there continues to be speculation that other bidders for Lucent could surface. However, a person familiar with the matter says that while there has been "some interest" from other companies, there are no serious discussions under way with potential buyers. The person declined to name these other companies. A spokesman for Alcatel in Paris declined to comment, as did a spokeswoman for Lucent. At 4 p.m. in New York Stock Exchange composite trading, Lucent shares were unchanged at $9.90, while Alcatel's American depositary shares rose 59 cents to $31.64. Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved.