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Alcatel-Lucent Message Board

  • tickerguy_2000 tickerguy_2000 Oct 22, 2013 2:39 AM Flag

    Wireless Unit Not For Sale?


    Michel Combes has publicly stated that he intends to raise $1Billion in asset sales over the next two years, not $2.7 Billion. ALU's wireless division accounts for $4.62 billion of ALU's annual revenue, on a revenue basis that is 20% of the company. Would Michel Combes and the BOD sell 20% of the company to Nokia for a fire sale price of less than one time annual sales? Two billion seven million would only be 60% of the annual sales of the wireless division. And $1 billion, some articles mention for the sale of ALU's wireless division ,is a laughable price----At that price I can envision investors marching through the streets of Paris to the Eiffel Tower chanting "NO SALE, NO SALE, NO SALE".


    Perhaps there is an "ANN" in ALU's future just as there was a "NSN" in Nokia's past. It would seem far more reasonable that ALU's wireless division is first spun off and then a 50/50 Alcatel-Lucent Nokia Networks (ANN) is created with Nokia contributing $2 billion for its 50% interest. Such an arrangement would be a win-win-win for all parties involved. A win for the French government and its concerns about retaining strategic assets, a win for Alcatel-Lucent by improving its balance sheet and a win for Nokia by expanding its market share.

    If ALU's wireless division is really up for sale, surely there will be other bidders for the division, perhaps even a crowd of bidders. However, if ALU's BOD really wants to maximize the value of its wireless division "ANN" would be a much better choice than outright sale of the division.If Michel Combes is intending a change in the ownership of ALU's wireless division, I hope he is thinking about "ANN"---- "Ahead Of The Crowd". ............Tickerguy

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    • Maybe not for sale because they are about to get a PHAT PHAT contract..

    • ALU will have to start selling assets sooner or later. Cannot sell the submarine unit, got to find something that is worth something that will sell.

    • Agree that if ALU does some sort of deal for wireless with Nokia, we should retain an interest, likely as shares in a new company. I doubt that we could get 50-50 since NSN is essentially Nokia now (would Nokia distribute most of its cash?). I think a smaller interest for ALU is more likely, but with ALU adding a chunk of its debt, so that the separate, surviving divisions of ALU were not overloaded with debt.

    • I would guess all options are on the table... partnerships, division sales and investment stakes. The one thing I am certain of... CEO's don't give advance notice of pending plans. Examples: CEO of GE said he would never reduce the company dividend. Two weeks later he reduced it. Dan Hesse said he was not interested in buying CLWR. Guess what it happened. Then Hesse said, that's my 'best and final offer' and then raised his offer 3 times... So, when CEO's lips are moving regarding mergers, acquisitions, partnerships and dividends, they are lying.

    • cbjurczyk Oct 22, 2013 8:20 AM Flag

      Either way. A strategic alliance, a sale or some other deal will be announced with earnings. NOK's CC is up first, look for an indication on the 29th and the affirmation on the 31st. $ 2.7B is just the lowest bid that can come in, I will bet that number was leaked by Combs himself.

      As for the money being the amount of one years take on the wireless unit, what is stopping ALU from creating a similar deal as MSFT/NOK? Meaning, the highest bidder (NOK, Softbank, Samsung, Cicso, etc) gets the wireless unit, and ALU can come back in 2 years with a new wireless unit, better than before?

    • Most interesting!