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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (5531)	4/27/1998 9:11:00 PM
From: WiseGuy	Read Replies (1) \| Respond to of 6980

It appears to me Lucent is drifting further away from Bay. I wonder why Bay doesn't fully support frame relay in the first place... NEW YORK, April 27 (Reuters) - Lucent Technologies Inc , which announced plans to acquire data networking equipment firm Yurie Systems Inc for $1 billion, said it may want to pursue a future deal in the frame relay arena. Frame relay "is a space that customers are interested...you could expect either an internal development or acquisition in this space in the time to come," said Bill O'Shea, president of Lucent's data networking systems group. O'Shea, in a conference call with analysts and reporters, declined to comment on the timing or specifics of any possible deal, but said frame relay is consistent with Lucent's focus. Frame relay is a high-speed method of transmitting data across wide areas. Earlier on Monday Lucent said it will acquire Yurie, a leader in equipment for data, voice and video networking, for about $1 billion, or $35 a share, in cash. The Yurie acquisition would continue a string of acquisitions Lucent has made since being spun off from AT&T Corp in 1996. Lucent said it has spent more than $3 billion in acquisitions over the past year and continues to look for potential targets. The telecommunications equipment giant is becoming an increasingly powerful player in the data and Internet arenas. Analysts expect Lucent to announce several other deals over the next year. "We're tremendously excited to have a company as well regarded as Yurie become part of our data networking team....we're excited about strengthening our offering in a market place where growth rates are taking off," O'Shea said. The Yurie acquisition will will result in an unspecified charge against earnings in the third fiscal quarter and slightly dilute earnings in the first full year of operations after the deal closes, Lucent said. Lucent declined to comment on the extent of the dilution. The charge may run between 60 percent to 70 percent of the total purchase price of $1 billion, the company said. The specific charges will be determined after an independent accounting review. Lucent does not expect any layoffs related to the Yurie acquisition and may hire additional employees as the business expands. Lucent said it began talks to acquire Yurie less than four weeks ago. The two companies already worked together as part of a marketing pact forged last year. "What got us interested in moving from an OEM (original equipment manufacturer) relationship to an acquisition relationship was joint work that Yurie and Lucent were about to begin...once I looked at how intimate that engineering relationship would become, the more it became clear on how more natural it would be to do it together as opposed to at arms-length," O'Shea said. Yurie Chairman Jeong Kim declined to comment on industry rumors Bay Networks Inc had also considered bidding for the company. Yurie and Bay Networks forged a three-year alliance last fall. Bay Networks was informed of the Lucent acquisition, and the relationship between Bay Networks and Yurie is expected to continue, Yurie said. Bay Networks officials did not return calls seeking comment.