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Lucent unit bids at $3.5B
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June 21, 2001: 6:11 p.m. ET
Bids for Lucent's fiber optic unit lowered from $5B, report says
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NEW YORK (CNNfn) - Bids for the fiber optic unit of Lucent Technologies Inc. are coming in at $3 billion to $3.5 billion, lower than the anticipated $5 billion the business was expected to raise, press reports said Thursday.
Alcatel SA, which failed in its $23.5 billion bid to buy Lucent, and Italy's cable and tire maker Pirelli SpA have long been rumored to be in the running. But the Lucent unit is now attracting the attention of Linthicum, Md.-based Ciena Corp. (CIEN: up $1.78 to $39.24, Research, Estimates), according to Reuters.
"We're negotiating with multiple bidders to get the best value for Lucent shareholders," a Lucent spokesman said, who declined to comment further.
The Atlanta-based Optical Fiber unit, which makes and designs optical fiber, fiber cable and specialty fiber components for the telecommunications industry, employs about 6,300 people.
The unit had initially been expected to raise $8 billion to $10 billion but prospects were then cut to $5 billion. Now the business is expected to raise up to $3.5 billion, Reuter said.
Shares for Lucent Technologies have plummeted nearly 92 percent since their 52-week high of $67.18 but gained nearly six percent Thursday as the technology sector rebounded.
The decision to sell the unit is part of Lucent's (LU: up $0.31 to $5.62, Research, Estimates) strategy to focus on systems, software and services, the company said in March. Lucent is selling the unit in an attempt to pay off a heavy debt load. The technology giant has fallen behind rivals in the key optical networking market, struggling with manufacturing constraints and declining demand for its core telephone equipment products.
The Murray Hill, N.J.-based company also hopes to raise $600 million to $900 million by selling two manufacturing plants located in Oklahoma City and in Columbus, Ohio.
Lucent is under pressure to raise $2 billion to complete the spin-off of Agere Systems Inc. by Sep. 30. Agere (AGR.A: down $0.10 to $5.00, Research, Estimates), the former microelectronics unit of Lucent, went public in March. The struggling Lucent must also meet the terms of a $4 billion revolving credit line. 
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