Marlin Equity Partners is acquiring Tellabs (TLAB) for $2.45/share in cash, or $891M. The price represents just a 4.3% premium to Tellabs' Friday close. The deal is expected to close in Q4. (PR)
Tellabs +5.1% premarket to $2.47; some investors are betting on a higher bid arriving. Tellabs activist investor Dialectic Capital and co-founder Michael Birck back the deal. It follows years of telecom equipment share losses, as well as recent management upheaval and tragedy.
Tellabs (TLAB -6.9%) dove yet again after disclosing CFO Andrew Szafran has resigned for "personal reasons." Chief accounting officer Tom Minichiello will serve as interim CFO. The struggling telecom equipment vendor is already dealing with chairman and CEO transitions. (PR)
Though many telecom equipment names have performed well lately thanks to good earnings reports and capex optimism, Tellabs (TLAB -7.7%) made new multi-year lows thanks to mixed Q4 results and guidance for Q1 revenue of $205M-$220M, below a $241.6M consensus. Gross margin is expected to fall to ~34% from Q4's 42.2%. Tellabs has been steadily losing share, and has also seen a CEO transition. The Data segment (switches/routers) saw a 48% Y/Y sales drop - in response, Tellabs says it's discontinuing its 9200 edge router, and will cut 300 jobs as a result. (transcript)
Though FQ4 results missed estimates and guidance for FQ1 revenue of $435M-$460M isn't favorable with a $458.6M consensus, Ciena (CIEN +1.8%) is trading higher. Few expected a great report in light of soft wireline capex, and a record backlog is going over well. Also, gross margin rose 290 bps Q/Q to 42.7%, and is expected to stay in the low-40s in FQ1. Optical transport sales (62% of total) saw a 2% Y/Y decline and optical switching fell 50%. But carrier Ethernet sales rose 66% and software/services 21%. TLAB +1.5%. FNSR +5.3%. OCLR +2%.
Tellabs (TLAB) +15.3% after declaring a $1/share special dividend and naming interim chief Dan Kelly its permanent CEO. The telecom equipment vendor, which has long been bleeding share due to its exposure to legacy technologies such as SONET/SDH, closed yesterday not too far away from 16-year lows. Some may be hoping Kelly's R&D background will help Tellabs improve its competitive footing.
In addition to declaring a $1/share special dividend, Tellabs (TLAB) announces it has named Dan Kelly its permanent CEO. Kelly became interim CEO in June, stepping in for Rob Pullen, who died of cancer in July. Prior to June, Kelly was Tellabs' R&D chief. Shares are halted.
Tellabs (TLAB +4.8%) is rallying after announcing it will start buying back shares again, leveraging $224.6M left in a program authorized back in Nov. '07. The optical networking vendor, which has been hit hard by poor industry capex and a dropoff in legacy hardware sales, will finance the purchases with its $942M cash/investment balance. (PR)