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To: Dennis Roth who wrote (113399)	2/15/2002 2:37:07 PM
From: Ruffian	Read Replies (1) \| Respond to of 152472

Alcatel's wireless equipment unit on the block thedeal.com ardArticle&c=TDDArticle&cid=1013038857424 , The Deal, by Josh Kosman and Alan Tillier, Posted 2002'02'12'est18:40 Financial buyers may soon be bidding for Alcatel SA's radio frequency systems (RFS) business in the United States, sources said. The French telecom equipment and network giant has retained Société Générale to sell the unit, which makes connectors and antennas for radio base stations. Books have already reached prospective buyers, who say Alcatel is looking for $500 million in what will likely be a difficult sale. Alcatel reported a net loss of $4.27 billion for 2001 and has said it would sell noncore assets to reduce debt. A press officer at Alcatel declined to comment on whether this particular asset was on the block. The logical strategic buyers for RFS are small and undercapitalized, so a financial buyer could win these assets, a source said. U.S. buyout firms that would be most interested in the business include Quadrangle Group llc, Spectrum Equity Investors, Providence Equity Partners and Boston Ventures, sources said. Globally, Alcatel does not rank highly in winning contracts to supply wireless base stations for third-generation phones. Telecom companies such as AT&T Corp., Sprint Corp. and Verizon Communications have awarded Ericsson AB the largest amount in third generation contracts — $9 billion — giving it a 23% global market share, with Nortel Networks, Nokia Corp. and Lucent Technologies Inc. not far behind, according to a recent Nortel presentation to analysts. Alcatel, which does not rank in the top five, “obviously [hasn't] done well selling third-generation contracts,” said an analyst who covers the company. “They basically have lost out in the U.S. in the move to third-generation, so this makes sense.” Meanwhile, its chief U.S. competitors such as Lucent and Nortel are restructuring, making them unlikely suitors, sources said. For a financial buyer, though, a deal for the business would present a challenge, as lenders have shown they are not excited about buying debt in telecom assets. Lehman Brothers Inc., for example, has been spending the past month trying to sell a loan and bond package to support GTCR Golder Rauner llc's $800 million buyout of a Verizon Communications wireless call processing unit. It is selling the loans at a discount price of 93.75 from an original discount of 98.50, and Verizon has agreed to buy up to $75 million of the bank loans — 22% of the loan, sources said. Still, Alcatel has been willing to sell at low multiples. Los Angeles private equity firm Platinum Equity llc agreed Jan. 15 to buy Alcatel's business communications installation and service unit for about $716 million, analysts said. Sales of the Alcatel business were about $1.3 billion a year. Platinum paid for Alcatel's customers, and will be able to sell, install and service a wide range of services besides Alcatel's to clients in North America and Europe. A tough sell In the early stages of auctioning off it's radio frequency systems (RFS) business in the U.S., France's Alcatel SA may have a tough time getting the $500 million its looking for. (Exluded -- table listing potential bidders)--

To: Dennis Roth who wrote (113399)	2/15/2002 2:46:49 PM
From: slacker711	Read Replies (2) \| Respond to of 152472

Irrational fear has replaced irrational exuberance, IMHO. There is no doubt of that. Most of the wireless companies are being priced for a significant risk of bankruptcy. Just like Citibank in '90, we could see big returns.....if they dont go bankrupt <g>. Slacker