Pirelli denies $4 billion bid for Lucent optical fiber unit

June 1, 2001
June 1, 2001 Pirelli SpA is the latest telecommunications giant said to be interested in bidding for Lucent Technologies' optical fiber and cable unit.

June 1, 2001 Pirelli SpA, (www.pirelli.com) Europe's largest cable manufacturer and supplier, is the latest telecommunications giant said to be interested in bidding for Lucent Technologies' (www.lucent.com) optical fiber and cable unit. Although an official company statement denies formal discussion with Lucent, investor sources familiar with both companies allege that Pirelli has bid $4 billion for the Lucent division.

Shares in Pirelli stock fell to a new low for the year on Thursday on investor rumors concerning the possible bid. In denying the proposal, however, the cable manufacturer acknowledged in a statement that "it confirms its strong interest in following every development in the sectors in which Pirelli operates."

Earlier in the week, acquisition talks between Lucent and France-based cable manufacturer Alcatel (www.alcatel.com) came to a halt, reportedly over disagreement of potential management control.

A behind-the-scenes key player in the acquisition interests is Corning Inc., (www.corning.com) which has cross-licensing agreements with Lucent that could impact any deal. Ironically, analysts say that Pirelli became an active player after receiving some $3.6 billion from a sale of its optical components division to Corning last year.

A Lucent merger involving either Alcatel or Pirelli would project each company behind Corning as the world's second-largest maker of optical fiber and cable.

Lucent, meanwhile, says it has had interest from several other bidders. Reportedly among the interested is Japanese fiber-optic component manufacturer Furukawa Electric. Co.

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