Juniper Gets Jilted (JNPR)(ALU)(MOT)(NT)(RBAK)

The gang down on Wall St. thinks Juniper got left at the altar when Ericsson bought rival Redback. Juniper and Redback noth sell edge routing equipment for the internet. CIBC was so upset that they downgraded Juniper’s stock.

Of course, Redback’s market cap is about $2 billion, and Juniper’s is over $10 billion. Even in this day and age, that is a fairly big difference.

There was another good reason to pass up Juniper and that came out today. Juniper is going to take a $900 million charge for backdated options.

All is not lost. Motorola may still be interested in Juniper. Even though Alcatel and Lucent have merged, they might want to take on a third partner. Nortel could use some help as well.

The question for Juniper shareholders is whether they will get an 18% premium like the Redback shareholders got.

Redback’s stock has outperformed Juniper’s for almost the entire year. That maybe one sign.

The other key issue is whether Juniper can get the options issue behind it quickly, file past financials, and show the its is continuing to grow and improve operatin income. If not, the premium in any takeover may be very small indeed.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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