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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: P314159d who wrote (5554)	11/22/1998 3:04:00 AM
From: Cents	Read Replies (1) \| Respond to of 12623

I read that if rumors were true, then we are to hear of it by Monday. This was from TSC I believe. What happens if all this does not pan out by then? Will this stock be back to 16? Also, could the rise in volume Friday be because those with Nov. 17.5 in-the-money calls exercised to take advantage of the takeover rumor to sell on the up gap at open Monday morning? This is my guess. Sounds logical to me. Cents

To: P314159d who wrote (5554)	11/23/1998 2:19:00 PM
From: john dodson	Respond to of 12623

What might the dollar figure be for a third TLAB offer for CIEN, if it ever materializes? Here's what we know: 1. Initial TLAB offer of 1 share of TLAB for 1 share CIEN, on 6/3/98: TLAB closed at $63.8 CIEN closed at $61.7 Purchase price for CIEN ~= $6.5 Billion ($63.8 x 103M shares) 2. Revised offer of 0.8 shares TLAB for 1 share CIEN, on 8/28/98: TLAB closed at $49.0 CIEN closed at $35.3 Purchase price for CIEN ~= $4.0 Billion (0.8 x $49 x 103M shares) 3. Mutual termination of merger, on 9/14/98: TLAB closed at $37.6 CIEN closed at $13.1 - A market cap ~= $1.3 Billion 4. TLAB's ceo on CNBC, on 10/19/98: -Says CIEN sees themselves as a $30 or $40 stock -Ciena decided to wait it out rather than sacrifice a fairly significant amount to get a deal done -Ciena is seemingly an attractive opportunity, but with some hesitancy about trying to do something at these low prices (Ciena was about $11 at this time) -TLAB does not have to buy somebody to "ensure our future" Now for the hypothetical part: 1. At today's price of $19, Ciena has a market cap ~= $1.9 Billion. Ciena was willing to take $4 Billion before, but is not willing to take $2 Billion now. TLAB is trading at $55 today, so 0.6 shares of TLAB for each CIEN share, yields 0.6 * $55 = $33/shr for CIEN. 2. An offer of 0.6 shares of TLAB solves several problems: o CIEN gets $33/share, or $3.3 Billion - This is in the "$30 or $40" range Ciena sees for itself o TLAB lowered the bid from 1 share to 0.8 shares already. It could lower it again to 0.6 shares. -In market cap, the offer went from $6.5 Billion to $4.0 Billion. An offer of 0.6 shares would equate to $3.3 Billion using today's TLAB price of $55, barely 1/2 of the original offer. -So, TLAB could claim they got CIEN for "bargain basement" prices. 3. Where this does not jive with what TLAB's ceo said is - He made it sound like CIEN has concluded that it WILL wait it out, until Ciena's revenues return to healthy levels. This implies that either TLAB was not willing to offer $30+ or that Ciena was not willing to accept it. Sounds like Ciena's plan is to wait it out until the stock price gets back to where they want it, then reconsider a merger. Oh well, time will tell. -John Dodson