Will Nortel Buy Tellabs? Hopefully Not
August 30, 2007 by Douglas A. McIntyreLightreading is reporting that telecom equipment company Nortel (NT) may be close to buying Tellabs (TLAB). NT may have already made an offer of $14 to $15. According to Lightreading, "Tellabs is seen as a solid technical fit for Nortel, according to sources close to both companies,"
While it may appear like a good fit, the price would be too hight. TLAB has a market cap of $4.5 billion. The price NT would pay probably moves that up to $6 billion. And, that is to buy a company which did $534 million last quarter with an operating profit of $28 million. So, the price would be almost three times annual revenue.
Nortel trades at about 70% of its annual revenue base of $11.5 billion.
Tellabs would get almost 45% of the company for bringing in 20% of the revenue.
Douglas A. McIntyre
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.