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Gold/Mining/Energy : JDS Fitel -- Ignore unavailable to you. Want to Upgrade?

To: Chris Stovin who wrote (659)	1/30/1999 8:06:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 815

JDS Uniphase deal meets with investor approval Karyn Standen The Ottawa Citizen JDS Fitel's stock soared more than 12 per cent on the Toronto Stock Exchange yesterday as investors continued to give thumbs up to the Nepean optical switch-maker's merger with California's Uniphase Corp. JDS Fitel ended the day up $7.40 to a new 52-week high of $67.40. The shares are now trading at more than five times their Oct. 8 low of $12.45. Uniphase Corp.'s shares also skyrocketed, gaining $10 3/8 on the Nasdaq to finish at $91 1/8. U.S., a 52-week high. However, while industry watchers widely applaud the deal, saying it provides the one-stop shopping demanded by telephone-equipment vendors who need fast access to complex products rather than to product pieces, analysts are still trying to figure out how shareholders will be affected by plans to trade the new company on the Nasdaq, and by the expectation that the wholly owned Canadian subsidiary will continue to trade on the Toronto Stock Exchange. A JDS Fitel spokesman said yesterday the company cannot comment yet on any plans to trade JDS Uniphase Canada shares on the TSE because of securities regulations. Under the terms of the merger, JDS Fitel shareholders living in Canada will receive .50855 shares in the newly formed JDS Uniphase Corp., or in its Canadian subsidiary, JDS Uniphase Canada. Current shareholders in the two companies will each own 50 per cent of the combined entity. The JDS Uniphase Canada shares will be the economic and voting equivalent of shares of JDS Uniphase's common stock, which will trade on the Nasdaq. In fact, the JDS Uniphase Corp. shares that will trade on the Nasdaq, once the deal is closed (likely in June) will be the renamed Uniphase Corp. shares now trading on the U.S. exchange, says Konstantin Kotzeff, JDS Fitel's vice-president of legal affairs. JDS Uniphase Corp. will be quoted on the Nasdaq and will report financial results in U.S. dollars. JDS Uniphase Canada shares can be exchanged on a one-for-one basis for JDS Uniphase shares, trading on the Nasdaq, at any time, Mr. Kotzeff added. One of the questions stumping some analysts was whether Canadian investors will be able to continue holding JDS Fitel stock in their registered retirement savings portfolios. As analysts pointed out, once the JDS Uniphase Canada shares are converted into JDS Uniphase stock (which will trade on the Nasdaq), Canadian shareholders of the U.S. stock may breach the U.S. content restrictions of their RRSP portfolios. However, according to Kevin Li of Toronto's CIBC Wood Gundy (which advised JDS Fitel's board regarding the proposed deal), "the shares of JDS Uniphase Canada will trade on the Toronto Stock Exchange, and for all intents and purposes, it is Canadian property and can go into your registered retirement savings plan." Mr. Kotzeff confirmed that Canadians shareholders will continue to be able to hold shares of the new entity in their RRSP portfolios. "Canadian shareholders are allowed to take the exchangeable shares of a wholly owned Canadian subsidiary," he said. "These exchangeable shares will be shares in a Canadian company, and therefore will constitute Canadian property for RRSP purposes." Indeed, considering that the "vast majority" of JDS Fitel shareholders holding shares that trade on the TSE are Canadian, "this structure was selected in order to provide shareholders of JDS who are Canadian residents, Canadian property for their RRSP portfolios," Mr. Kotzeff said. There was also the question of whether shareholders of JDS Uni-phase Canada and of JDS Uniphase Corp. will receive separate financial documents, such as quarterly and annual reports. "In general, when you have a merger between a Canadian company and a U.S. company, they'll have a combined (financial) report," said Kathy Gay of CIBC Wood Gundy. However, Canadian companies listed on the Toronto Stock Exchange must file financial results in Canada, and these include quarterly and annual reports. While Mr. Kotzeff would not comment on whether JDS Uniphase Canada would issue its own financial results, he did say investors will receive information regarding the Canadian subsidiary. "Shareholders will have the financial information they need on JDS Uniphase Canada and on JDS Uni-phase Corp.," he said. Mr. Kotzeff also confirmed that the share activity of JDS Uniphase on the Nasdaq will affect trading of JDS Uniphase Canada. "The shares (of JDS Uniphase and of JDS Uniphase Canada) are the economic equivalent of each other. The exchangeable (JDS Uniphase Canada) shares will mirror the JDS Uniphase shares that trade on the Nasdaq," he said. While Mr. Kotzeff acknowledged "not every question can be answered at this time," he pointed out that JDS Fitel has made extensive efforts to provide shareholders, analysts and the media with as much information as possible. "We've had conference calls with analysts, investors and the media," he said. "In addition, we've had investor meetings in New York, Toronto and Montreal, and additional conferences are scheduled in numerous cities in the U.S. The proxy circular that will be issued following approval by securities regulators will provide a comprehensive and detailed explanation."

To: Chris Stovin who wrote (659)	1/30/1999 8:10:00 AM
From: Glenn McDougall	Respond to of 815

Markets show enthusiastic support for JDS-Uniphase merger JAMES STEVENSON TORONTO (CP) - Trading in Canadian high-tech star JDS Fitel was fast and furious Friday, the day after the company unveiled a bold merger plan with California-based Uniphase Corp. The markets were clearly pleased with the plan to combine the two complimetary producers of high-tech fibre-optic components - a move one analyst said would "change the world." JDS Fitel shares ended the day Friday at $67.40 on the Toronto Stock Exchange, an increase of $7.40 from Thursday when trading was halted for the merger announcement. The stock opened at $71.75 per share, reaching as high as $72 on heavy volume of more than 2.8 million shares. The merger has changed the competitive landscape of the high-tech industry overnight, said analyst Bill Magill of Montgomery Securities in San Francisco. And he predicted it would speed up other mergers in the high-tech industry as companies scurry to compete. "Most of the companies to date have either concentrated on the JDS side of the industry or the Uniphase side, but nobody had really brought the two together before this," Magill said. "It does change the competitive landscape, (and) I think other companies in the industry will have to think about where they blend the technology that now JDS Uniphase will have in-house." Uniphase makes high-tech components designed to allow fibre-optic telephone systems to carry more information. JDS Fitel is in a similar line of work, making different but complementary components. Uniting the two companies will provide customers with complete, bundled components that will allow equipment makers and network providers to cut costs and build their systems more quickly. The new company, JDS Uniphase Corp., will be one of the largest and most advanced producers of fibre-optic equipment in the world, with operations in eight countries. It will have 3,600 employees and customers that are among the best-known telecommunications and cable companies in the world. And because there is little overlap between the two companies, few layoffs are expected, said Magill. The merger was a perfect corporate fit that will "change the world," said Duncan Stewart of Tera Capital Corp. in Toronto. "They are both superb at what they do, but the nice thing is the two companies don't compete, they reinforce each other," Stewart said. Based on the averaged vital statistics of both companies from the last quarter, the merged company will have annual revenue of $510 million US, revenue growth of 56 per cent over three years and profit growth of 74 per cent over the same period. Under the deal, Fitel shareholders in Canada will be entitled to nearly 0.51 of a share of JDS Uniphase Canada, a wholly-owned subsidiary of the merged company, or the same amount of JDS Uniphase, for each share they own. Over the last year, sales and operating profits of both companies have grown 60 per cent and 64 per cent respectively. The company will keep both its head offices in Canada and the United States. Uniphase chief executive Kevin Kalkhoven will be co-chairman and chief executive; JDS president Jozef Straus will be co-chairman, president and chief operating officer. Each company will nominate half of the board. The deal is still subject to shareholder and regulatory approval on both sides of the border. © The Canadian Press, 1999

To: Chris Stovin who wrote (659)	1/30/1999 8:17:00 AM
From: Glenn McDougall	Respond to of 815

JDS Fitel shares soar on merger plan Saturday, January 30, 1999 SIMON TUCK Technology Reporter Globe & Mail Ottawa -- JDS Fitel Inc. shares soared into record territory yesterday as investors applauded the company's proposed merger with Uniphase Corp. to create a powerhouse in the consolidating fibre-optics equipment industry. Shares in JDS jumped $7.40 or 12 per cent to $67.40 on the Toronto Stock Exchange, boosting the value of the merger by $578.1-million to $5.3-billion. The Nepean, Ont.-based company's shares have now increased in value more than fivefold since plummeting to a 52-week low of $12.45 in October. Stock in Uniphase of San Jose, Calif., also hit a 52-week high, rising $10.37 (U.S.) to $91.12 on the Nasdaq Stock Market. Both stocks were heavily traded. Industry analysts said the mega-merger to form JDS Uniphase Corp., which will create the largest public player by far in the industry, was a clear response to their bigger customers' plans to increase outsourcing. And they said more consolidation within the fibre-optics industry is on the way -- perhaps including more purchases by JDS Uniphase, a company with a history of acquisition on both sides of the family. "This isn't the beginning of the end, it's the end of the beginning," said Duncan Stewart, a portfolio manager at Tera Capital Corp. in Toronto. The "merger of equals" that JDS and Uniphase announced late Thursday will create a company with a market value of more than $10.6-billion after yesterday's runup in share prices. Mr. Stewart said the share price gains make perfect sense. "This is a dream team. Their strengths match up perfectly." The combined company is to trade on both the TSE and Nasdaq, assuming the merger is approved by regulators and both companies' shareholders. JDS investors will receive 0.50855 shares of the new company for each JDS share they currently hold. The deal -- the second-largest in Canadian high-tech history -- is expected to close by the end of June. Analysts said the mega-merger by no means signals the end of consolidation in the fibre-optics industry, a lucrative but still embryonic sector that has seen a flurry of acquisitions and mergers over the past year or so. Uniphase makes specialized lasers that boost the capacity of fibre-optic networks. JDS makes equipment that also boosts capacity but its product line has virtually no overlap with that of Uniphase. Michael Urlocker, a technology analyst at Credit Suisse First Boston in Toronto, said the consolidation trend among fibre-optics suppliers is a direct response to their largest customers' move to outsource the manufacturing of components to suppliers. Jozef Straus, president, chief executive officer and co-founder of JDS, said late Thursday that some of his customers had suggested that it would be easier for them if JDS and Uniphase were to combine. Northern Telecom Ltd., a major customer for both JDS and Uniphase, announced plans this month to sell some of its plants and outsource a large chunk of its manufacturing. The move will affect 8,000 of its 20,000 manufacturing jobs and save $250-million (U.S.) to $300-million a year, the company said at the time. Northern Telecom rivals such as Lucent Technologies Inc. and L.M. Ericsson Telephone Co. Inc. have also shown more interest in outsourcing in recent years, as suppliers who specialize in that end of the business have shown they can make components and products faster and cheaper than their larger customers. Internet gear provider Cisco Systems Inc. is seen as the outsourcing forerunner within the sector. "JDS and Nortel are responding to the same market pressures but they're going in opposite directions, as is appropriate for a component supplier and a component buyer," Mr. Urlocker said. The JDS-Uniphase partnership, which will allow the new company to provide a more complete product package to its customers, is almost certainly bad news for their fibre-optic rivals, analysts said. But the pie is large and expansive enough for these other companies, namely E-Tek Dynamics Inc. of San Jose, Calif., Ortel Corp. of Alhambra, Calif. and SDL Inc., also of San Jose, and a host of new challengers to do well. "It makes life for E-Tek and Ortel a little harder," said Mr. Stewart. "[But] they're not hurting."

To: Chris Stovin who wrote (659)	1/30/1999 3:46:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 815

Chris -- If you want to listen to the cc replay, the number is: 800-558-5253, access code 1635102#. There were several questions regarding US versus Canadian shareholders and tax consequences. As I understand it, US holders will be issued shares in JDSUniphase and Canadians will maintain the Canadian equivalent until they decide to sell. Once the current shares are redeemed (could take years), all shares will be JDSUniphase and traded on both the Nasdaq and TSE. As for the overall tone of the conference call, it appears the market is growing by leaps and bounds and instead of competing and doubling their efforts to enter each other's markets, the two companies decided to join forces and use their combined strengths to be first to market in both active and passive components.(Speed to market emphasized over and over.) They will develop more modules but will not become a systems vendor. Any shareholders who have questions can call Leslie Brown at Uniphase, 408-570-2000 or Eileen Nolan at JDS, no phone no. given. Merger is estimated to close by the end of June though the two companies would like it to happen sooner. Pat