Sunday, April 02, 2006

Hit #88

The Lucent/Alcatel merger is finally confirmed. The deal has been in the works for a while now.

The stock deal values Lucent at $3.01/share, a premium of 37% over my average cost of $2.2/share. I will be keeping the Alcatel shares I get in exchange.

I had recommended Lucent along with the other beaten down telecom stocks in this post. I did end up buying quite a few of these. Many have appreciated considerably since then, and aren't attractive anymore.

I was expecting Motorola to be the most probable buyer of Lucent, especially given the security projects that Lucent is so closely involved in. Motorola, with its cash pile of around $14 billion, must be considering a few acquisitions of its own.

This deal may run into another political storm despite the parties making some concessions to respond to such concerns. Hopefully the reaction this time from the political class and the general public won't be as dumb as the reaction to the ports deal.

Previous hit - Transmontaigne (#87)


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