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Technology Stocks : DSC Communications -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (4237)	6/4/1998 8:32:00 AM
From: Steve Becker	Read Replies (1) \| Respond to of 4429

Alcatel stock slumps on share issue PARIS, June 4 (Reuters) - Shares in telecoms giant Alcatel slumped on the bourse on Thursday after Chairman Serge Tchuruk said the group would issue 20 million new shares to buy U.S. telecommunications equipment maker DSC Communications DIGI.O. Alcatel's stock, which was up more than one percent in early trading, was down 6.37 percent at 1,219 francs at 1200 GMT. The bourse's CAC-40 index was down one percent at the same time. "They're planning to issue lots of new shares and that's weighing on the stock," one Paris trader said. "They're also paying a big premium for this acquisition," the trader said. Alcatel, which announced the acquisition on Wednesday, said it would pay $4.4 billion in stock for DSC. Under the terms of the agreement, which has been approved by the boards of both companies, DSC shareholders would receive 0.815 shares of Alcatel American Depository Shares for each DSC share. If converting into ordinary Alcatel shares, each DSC share would be worth 0.163 shares, the companies said. Alcatel will fold Dallas-based DSC into its U.S. telecoms equipment business, Alcatel Network Systems Inc. It said on Wednesday that it expected the deal to have little impact on its 1999 earnings but to be accretive thereafter. By 2000, annual cost savings from combining the businesses should reach $200 million, it said. The value of the deal is based on the 125 million shares of DSC common stock outstanding, and Alcatel's ADS, which closed on the New York Stock Exchange on Wednesday at $47.4375. DSC's stock closed at $19.6875 on the Nasdaq stockmarket. (From: dljdirect.com ) The "0.163 shares" above is converting to the shares traded on the France exchange. The translation to the ALA ADR is 1 DIGI = 0.815 ALA. I'm bummed I sold shares a few weeks ago that I promised to myself I'd buy back at $16.50. I didn't do it last week. Luckily I didn't sell my entire position. Steve