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

To: Mark Oliver who wrote (6226)	6/4/1998 4:25:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 6980

There were three DJ reports, here's the first: Bay Networks Up 8% On Renewed Rumors Of Buyout By Nortel June 04, 1998 4:17 PM NEW YORK (Dow Jones)--Bay Networks Inc.'s (BAY) shares shot up nearly 8% Thursday on renewed rumors it is a takeover target. A trader said that according to one rumor, Bay has received a $40-a-share offer from Northern Telecom Ltd. (NT), and will consider it at a special board meeting this weekend. A Bay spokesman wasn't immediately available for comment. Two deals this week in the networking-equipment sector also could be fanning the flames of speculation, a market source said. Thursday, Alcatel Alsthom (ALA) agreed to buy DSC Communications Corp. (DIGI) for $4.4 billion, an 80% premium to DSC's market value at the close of trading Wednesday. Earlier this week, Tellabs Inc. (TLAB) agreed to acquire Ciena Corp. (CIEN) for stock valued at $6.9 billion. The trader said Northern Telecom, or Nortel, wants to reach an agreement to buy Bay before Bay's price runs up in response to the rich premium paid for DSC. A different industry source said the rumors about a takeover of Bay were intensifying. He added that he has heard "this is going to be the summer of acquisitions, and they're all going to be big." Bay recently traded at 30 1/8, up 2 3/16, or 7.8%, on volume of 8.8 million shares. Average volume is 5 million shares. Ericsson Said In Running At least two other makers of telecommunications equipment are rumored to be courting Bay Networks, the No. 2 maker of computer networking gear. Last week, talk that Lucent Technologies Inc. (LU) was prepared to buy Bay sent its stock up 9%. Sweden's L.M. Ericsson Telephone Co. (ERICY) also is said to be in the running, a trader said. While Siemens AG of Germany is also thought to be shopping for acquisitions, it hasn't been linked to Bay Networks. Other data-networking companies said to be takeover candidates are Fore Systems Inc. (FORE), Ascend Communications Inc. (ASND) and Cabletron Systems Inc. (CS). The leading maker of networking gear, Cisco Systems Inc. (CSCO), is believed to be too big to be acquired. Fore's shares recently were up 2 3/32, or 10.5%, to 22 1/8. Ascend was up 2 11/16, or 6.4%, to 44 5/8 and Cabletron was up 7/16, or 3.8%, to 12. The rumors about Nortel and Bay go back at least to the middle of last month, when an unconfirmed report that Bay had rejected a Nortel offer as too low sent the stock up 16%. There's also talk in the markets that Bay has instructed its investment bankers to draw up financial reports for prospective buyers. Bay Networks' recent volatility isn't the only sign the markets expect something to happen. Options traders a buying up Bay's June 30 and June 35 call options, which would likely increase in value if Bay were to sign a deal over the weekend. -Sean Davis; 201-938-5234 -Dwight Oestricher; 201-938-5266

To: Mark Oliver who wrote (6226)	6/4/1998 4:27:00 PM
From: Anthony Wong	Respond to of 6980

Long-Running Takeover Rumors Regarding Bay Networks Intensify June 04, 1998 4:10 PM NEW YORK -(Dow Jones)- The rumor that refuses to die - that computer-networking equipment maker Bay Networks Inc. will soon be sold - intensified Thursday with talk that Canadian telecommunications-equipment maker Northern Telecom Ltd. has made Bay an offer of $40 a share. Shares of Santa Clara, Calif.-based Bay (BAY) finished trading up $2.938, or 11%, at $30.875. Volume of 10.5 million placed Bay atop the Big Board actives. In addition, options activity heated up. Traders bought at-the-money and out-of-the money call options, which will increase in value if Bay signs a deal over the weekend. Bay has been closely watched because it stumbled badly in one of the technology world's hottest markets. When it was formed by a 1994 merger, Bay's sales surpassed those of current market leader Cisco Systems Inc. Cisco and others targeted and won the lion's share of the Internet business. Shares of Bay traded higher last week on renewed chatter that a long-rumored sale may be in the works. Rumors have been swirling around Bay since mid-March when the company warned it would miss earnings expectations. The takeover talk intensified a few weeks ago after a report surfaced that the company rejected an offer from Northern Telecom. Bay denied the report, but its response has done little to stop scuttlebutt that NorTel would come back with a higher bid. Bay Networks has found itself facing competition from Cisco and 3Com Corp. in low-end workgroup switches, a market that Bay had to itself until late last year. Many of Bay's products are becoming more like standard commodities, subject to intense competitive pressures from Cisco and 3Com. Bay's troubles come amid a rapid convergence of the voice and data networking industries. Companies in both industries are stockpiling promising technology and forming key alliances to develop gear that can handle voice, video and data simultaneously. Rumors making the rounds Thursday said Bay would consider a NorTel offer at a special board meeting this weekend. One trader told Dow Jones that NorTel wants to reach an agreement before Bay's price runs up in response to the rich premium Tellabs Inc. agreed to pay in its planned acquisition of Ciena Corp. The rumors may have also been stoked by Alcatel-Alsthom SA's announcedment Thursday that it will gobble up DSC Communications Corp. Another industry source said "this is going to be the summer of acquisitions, and they're all going to be big." Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: Mark Oliver who wrote (6226)	6/4/1998 4:29:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 6980

Options Report: Bay Networks Takeover Rumor Makes Comeback June 04, 1998 4:11 PM By Steven M. Sears NEW YORK (Dow Jones)--The Bay Networks Inc. takeover rumor is back Thursday for an encore performance a week after this old rumor last inspired trading. With the stock up 2 1/4 at 30 3/16 on heavy volume, traders are buying at-the-money and out-of-the money call options, which will increase in value if Bay Networks signs a deal over the weekend. The June 30 call is up 15/16 at 2 on volume of 9,923 contracts, compared with open interest of 17,330 contracts. The June 35 call is up 1/8 at 9/16 on volume of 5,415 contracts, compared with open interest of 6,310 contracts. This time, Northern Telecom is said to be ready to sign a deal with Bay Network over the weekend. Northern Telecom declined to comment, and officials at Bay Networks weren't immediately available for comment. Last Thursday, Lucent Technologies was supposedly buying Bay Networks, and Nortel was just another possible acquirer along with Ericcson Telephone Co. and Alcatel-Alsthom, which said earlier in this session that it was buying DSC Communications. Rumors of weekend deals are often dangerous to trade on. A lot of money can be lost, or made, by people who buy and sell options on the assumption that a deal will be signed. If a deal fails to materialize, the value of the contracts plummets. Elsewhere in the options market: - Tommy Hilfiger Corp., the fashion-design house, is trading in the options market as if traders expect a bullish surprise from fiscal fourth-quarter earnings scheduled for release before the market opens Friday. After heavy trading in calls in the previous session, trading has slowed Thursday, but it's still bullish. With the stock up 11/16 at 67 7/8, there is light activity in the June 65 and 70 calls. Implied volatility in the contracts is 52% and 50%, respectively, compared with historical volatility of 45%. Volatility indicates how likely it is that the underlying share price will move in either direction.