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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (6554)	9/16/1998 8:39:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

A general interest article Ciena Suspects Sabotage of Merger By Mike Mills Washington Post Staff Writer Wednesday, September 16, 1998; Page B11 Ciena Corp. said it was gathering evidence that an unnamed competitor engaged in "legally questionable" activities to scuttle the company's now-failed merger with Tellabs Inc. Some of that evidence includes an e-mail message that a Ciena document says was traced to arch-competitor Lucent Technologies Inc. The Linthicum, Md.-based manufacturer of telecommunications equipment made the unusual allegations in a regular filing Monday with the Securities and Exchange Commission. In the filing, Ciena said it has been "accumulating evidence that a competitor may have engaged in targeted and legally questionable activities in order to undermine the Company's market position, as well as the proposed merger with Tellabs. The company has not yet reached any conclusions regarding this evidence, and is continuing to investigate." The document continues: "The company believes the short-term impact of such tactics can be significant; in fact, the company believes at least some of the adversity it has recently encountered is a direct result of such tactics. There is no assurance that use of such tactics will cease." Ciena also accused unnamed Wall Street traders of planting damaging news articles about the company in an effort to drive down its stock price. Ciena did not ask the SEC to take any action. The Ciena and Tellabs merger was canceled Monday after a steady decline in Ciena's share price made it unlikely that shareholders would approve the deal. The decision capped a three-month ordeal for Ciena, which had announced in June that it would be acquired by Tellabs for $7 billion. Ciena's SEC filing did not name the competitor or provide details on any of its allegations. "We're investigating things at this point," said Ciena spokesman Denny Bilter. "We have not concluded anything officially." But over the past two weeks, as Ciena struggled to salvage its merger with Tellabs, company officials privately speculated that Lucent, an equipment company spun off by AT&T Corp. two years ago and Ciena's chief competitor, played a role in the collapse of the deal. Lucent officials have strongly denied any involvement in the collapse of the merger. AT&T officials declined to comment on grounds that they do not discuss relationships with suppliers. The filing describes as "oddly timed" AT&T's Aug. 21 decision to drop Ciena as an equipment supplier. AT&T informed Ciena of its decision less than an hour before shareholders of both Ciena and Tellabs were set to approve the merger. Less than a week later, Tellabs demanded a lower price for Ciena and the deal was revalued at around $4 billion. On Monday, as Ciena and Tellabs called off their merger, Ciena chief executive Patrick Nettles called AT&T's Aug. 21 phone call to him "a very peculiar coincidence," then added: "I don't believe in coincidences." Sources said Ciena is investigating whether Lucent had any influence over AT&T's recent testing of Ciena products, which increase the transmission capacity of fiber-optics cables. AT&T leases laboratory facilities from Lucent in a building the two companies share in Holmdel, N.J. Also among the evidence the company is analyzing is an anonymous e-mail message sent on Aug. 28 to Tellabs public relations officer Thomas Scottino. The message accuses Ciena of falsifying test results to indicate its equipment had complied with certain industry standards. "I got it and I didn't know who it was from," Scottino said in an interview. "I forwarded it to our corporate counsel." Ciena conducted an analysis in an effort to determine the message's origins and concluded that its sender had an Internet address registered to Lucent Technologies in Murray Hill, N.J., according to a copy of the analysis. "Ciena had it traced," Scottino said, though he said the results were not shared with Tellabs. Bilter said Ciena could not comment on the e-mail message or any other potential evidence the company might be gathering. Lucent officials did not return calls regarding the e-mail message.

To: Glenn McDougall who wrote (6554)	9/16/1998 12:12:00 PM
From: Serge Collins	Read Replies (3) \| Respond to of 18016

This business about Matthews being too hard headed to ever allow a takeover has some investors worried. Many see the similarity between this stance and that of Ray Loewen and are afraid of a repeat performance at Newbridge. I don't know how much faith we could put into those comments attributed to Matthews, but some investors must be concerned about the possibility that he would block a takeover attempt. That sort of thing turns off many potential investors. This could be one of the reasons for the stocks lacklustre performance of late. That's just my hunch.