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

To: Jurgen who wrote (6543)	6/15/1998 5:41:00 PM
From: Paul Fine	Read Replies (5) \| Respond to of 6980

Bay/Nortel interview on CNBC a few minutes ago(4pm EDT). House said he had been approached by a half dozen companies over the past 18 months re buying Bay. Said only became interested now. Said Nortel was far and away the best choice. Nortel was asked why the big drop in their stock today. Street signaling that they had overpaid for Bay? Nortel replied that they paid less than Bay's 52 week high(maybe this is why we couldn't get more; the need to assuage current Nortel holders). Said the Street doesn't fully understand the benefits of the merger yet. Only valuing it as an entry/synergy into Enterprise market, but missing the key change in Telco market to IP(where Bay has key position and products). House was asked about Bay making current quarter. He replied that they were now in the "quiet period", but did add that they are on record from last week saying they expected to make the consensus est for the quarter(as I reported here last week). With Nortel closing at $54 and a .6 buyout, the value is only $32.4/share. Bay is trading below that now(closed at $30.75) due to the time value of money(deal won't close until late 3rd qtr/ Sept). Having the market go down over 200 pts today didn't help matters. I would expect Bay to make their numbers this quarter and see Nortel recover to the low $60's by the end of July(assuming the current market meltdown is shortlived). If you hold for another 3 months, I would expect you to make 20-30% on your money from today's close. If you believe you have a better opportunity elsewhere, go for it. Otherwise, Nortel will probably make a less volatile core tech holding going forward(IMO). Paul