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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Sector Investor who wrote (27676)	12/11/1997 8:18:00 PM
From: Taby	Read Replies (3) \| Respond to of 61433

Question: If you own ASND jan 99 call option at 30 and ASND is bought for $40 a share in Dec. 97, what would happen to the options? Obviously, the call is worth at least $10, what would happen to the remaining time premium? Does it roll over to the shares of the acquiring company that you receive? Thanks

To: Sector Investor who wrote (27676)	12/11/1997 8:58:00 PM
From: Duke	Read Replies (2) \| Respond to of 61433

Below a copy from LU thread: To: Immi (1080 ) From: bill c. Friday, Dec 5 1997 12:39AM EST Reply # of 1139 Immi: I have to disagree with all the speculation that Lucent will purchase ASND. I don't think it will happen, since Lucent purchased Livingston for $650 million. Why purchase Livingston in the first place? Livingston's products compete against ASND. The rumor mill has started because ASND is trading in the low $20. The company for Lucent is Bay Networks. They have been selling their products within the BCS division and are working together at the engineering level... until later. --------------------------------------- is there any networks engineer here agree or disagree with it?. It's would be nice if we have some discussion with LU thread members here or someone here go there start a debates about rumor. Don't you think? Duke

To: Sector Investor who wrote (27676)	12/11/1997 9:40:00 PM
From: sepku	Read Replies (2) \| Respond to of 61433

>>>The goodwill aspect is avoided with pooling of assets. And your point is?<<< I recall posting something, then you commenting, then I questioned, then you replied, then I clarified, and you summarized and then questioned for a point. Therefore, I cannot recollect what point ever existed, if there even was one... Style Pts.

To: Sector Investor who wrote (27676)	12/11/1997 11:09:00 PM
From: K MAC	Respond to of 61433

CGS is increased if inventory is marked up using the purchase method as opposed to a pooling of interests. Goodwill is recorded and amortized. Fixed assets are marked up to fair value, so depreciation expense increases. Any debt discounts will be amortized (if debt values are marked to fair value depending on interest rates). In other words LU would be taking on additional expenses, and their earnings and margins would be hurt without pooling. Also, it is easier to play games with a pooling of interests, that make the acquirer look better-especially when a high PE company like LU could use the high value of its shares to buy ASND who now has a reasonable PE. This is sometimes referred to as "bootstrapping". A compnay can contniue to raise EPS through financial reengineering as opposed to improved operations. Very common-especially in the M & A cycle we have been in for several years now. Another problem (or benefit of pooling to LU) is that assets of ASND would not be marked to fair value, but instead carried at historical cost. If any assets are sold after the merger, then fictitious "gains" would be recorded as income in years to come. The pooling method does not reflect the true price paid for ASND assets, and CGS , depreciation, and amortization of goodwil or debt discounts will not be included on LU's books. In other words, if pooling is used LU would be able to overstate income in many ways. IT would be in their best interest to use a pooling of interests. This may help with his point. Sorry to take up space trying to cover some of the basics of M&A, but I assure you that the above items and many others much more complex are a big part of how/or if a transaction of this size would take place. K MAC