Rumors abound that limping telecom equipment maker Lucent Technologies Inc. is about to become red meat in the corporate cage. But no fat-cat company has yet confessed to appetite.
In an irony last week, Lucent’s stock jumped amid speculation that Nokia Corp. wanted to buy the company.
Although both Nokia and Lucent forswore the reports, an optimistic stock market anticipated the prospects of a Lucent rebound if Nokia gobbled it up.
Market analysts were key to the unsubstantiated rumors when they suggested that a takeover by Nokia could be good business as the buyer could recover its investment by buying the company.
The buyer could also scoop up a tidy sum from spinning off Agere, Lucent’s microelectronics unit.
Nokia was not the only company in the rumor mills. Alcatel, whose representatives declined to comment, also was believed to be interested in Lucent.
Merrill Lynch analyst Michael Ching stirred interest in a possible take-over with the comment that “Lucent has run up recently on media discussion of being a takeover target. We believe that in the current environment, this is a possibility.”
Ching also pointed out that the company was vulnerable because it is in a state of flux under the temporary leadership of Henry Schact after the company fired Richard McGinn in October.
Not all analysts think a takeover is prudent. Epoch Partners analyst Seth Spalding said, “It would be big bucks, and the stocks (of the acquiring company) would get hammered because it’s an expensive acquisition,” adding that such a deal could raise antitrust and integration concerns.
The company’s stock has languished in the past year, recently dropping 78 percent to a 52-week low.
The company’s problems rest on its struggles to catch up with competitors like Nortel Networks, Cisco Systems and Hewlett Packard Co. in optical networking equipment.
