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To: Alan Crawford who wrote (246)3/22/2000 10:27:00 PM
From: zbyslaw owczarczyk
   of 278
Alcatel Will Complain About JDS Uniphase's E-Tek Buy (Update3)
By Erik Schatzker

Alcatel Will Complain About JDS Uniphase's E-Tek Buy (Update3)

(Updates with late trading.)

Paris, March 22 (Bloomberg) -- Alcatel SA, Europe's No. 2
phone-equipment maker, said it will complain to U.S. antitrust
enforcers that JDS Uniphase Corp. will command too much power to
raise prices if the biggest maker of fiber-optic components is
allowed to buy rival E-Tek Dynamics Inc.

JDS Uniphase agreed in January to buy E-Tek in a transaction
now valued at $20.3 billion. The U.S. Department of Justice is
scrutinizing the proposal and interviewing customers of both
companies to determine whether the acquisition would hurt
competition in the market for parts that boost the capacity of
fiber-optic networks.

Alcatel, E-Tek's No. 1 customer, wants the acquisition
delayed until it can find another source of components, said
Alcatel USA Vice President of Product Strategy Paul Harrison. That
process that could take as long as a year, he said.
``On some components there are no other suppliers,' Harrison
said. ``We don't want to get into a situation where there's only a
single supplier.'

Complaints by big customers like Alcatel ``bode ill for the
deal,' said Steven Newborn, a Washington antitrust lawyer with
Clifford Chance, Rogers and Wells.

Alcatel fears that JDS Uniphase will increase prices of some
products once it completes the purchase. Currently, Alcatel can
pressure the companies -- its two biggest suppliers of the parts -
- to keep prices down by offering more business to one than the
other. E-Tek got a third of its $72.5 million in sales from
Alcatel in its fiscal second quarter, which ended Jan. 1.

Widening Spread

Alcatel, based in Paris, is the biggest maker of fiber-optic
transmission systems used to send large amounts of phone and data
traffic back and forth undersea. It also makes systems for land
networks and plans to double its sales of those products in North
America to $400 million this year, targeting phone companies such
as MCI WorldCom Inc., Sprint Corp., Qwest Communications
International Inc. and Level 3 Communications Inc.

The difference, or spread, between the value of JDS
Uniphase's offer for E-Tek stock and the price of E-Tek stock has
widened to $61.99 from $28.77 Monday. That's a sign some investors
are doubting that JDS Uniphase will get antitrust clearance to
complete the acquisition. E-Tek fell 4 1/16 to 225 15/16 on the
Nasdaq Stock Market and dropped as low as 220 3/4 after the close
of regular U.S. trading. JDS Uniphase rose 3 7/8 to 130 7/8,
rising as high as 131 7/8 after the close.

Harrison said he hasn't been contacted by Justice Department
investigators and didn't know if other Alcatel officials had been
interviewed by phone or in person.

Lucent Technologies Inc., the world's No. 1 maker of phone
equipment and both a competitor and customer of JDS Uniphase and E-
Tek, yesterday said it had been questioned by Justice Department
lawyers over the telephone. Lucent said it took ``no formal
position' on the combination. Nortel Networks Corp., the biggest
maker of fiber-optic equipment, declined to comment.

Addressing Worries

JDS Uniphase and E-Tek haven't increased the prices they
charge Alcatel since they announced the acquisition on Jan. 17,
Harrison said.

In addition, JDS Uniphase has tried to address Alcatel's
worries by telling the company that it will be a valued customer
after the E-Tek acquisition. Harrison said he received assurances
from JDS Uniphase President Jozef Straus, who also visited Alcatel
Chief Executive Serge Tchuruk.

Still, Alcatel is concerned about getting enough thin-film
filter components. The filters are used in a process known as wave-
division multiplexing, or WDM, that combines the beams of multiple
lasers on a single strand of fiber, boosting the capacity of
optical networks. Once combined, JDS Uniphase and E-Tek, both
based in San Jose, California, would dominate the WDM component

Side Agreement

JDS Uniphase and E-Tek also struck a side agreement on Jan.
17 to supply each other with needed components until they complete
the acquisition. Unless JDS Uniphase could extend the agreement
while customers like Alcatel find other suppliers, ``if I were
betting, this would not go through' said Clifford Chance's

Alcatel's problem is that it has developed a dependency on
both JDS Uniphase and E-Tek as its only suppliers of certain
parts. Finding other suppliers that can meet Alcatel's strict
quality requirements and make enough parts will be difficult,
Harrison said. Components require a variety of tests before a
customer like Alcatel will qualify them.

The company likely will try to develop Corning Inc. as a
second supplier, as well as look to smaller companies, Harrison
said. Corning, the biggest maker of optical fiber, last month
agreed to buy NetOptix Corp. in a transaction now valued at $2.3
billion to gain the filter production it needs to make more WDM

JDS Uniphase is ``fully cooperating with the Justice
Department and providing them with whatever information they
require to evaluate the transaction,' Senior Vice President of
Business Development Mike Phillips said yesterday. The company
declined to comment on what its customers say to the Justice

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To: zbyslaw owczarczyk who wrote (247)3/23/2000 7:22:00 AM
From: John Carragher
   of 278
this is crazy. Like their is price competition now??? Both companies are running straight out , aren't?

Sounds like they are looking for them to tell them a firm price for the next year or two or limit price increases.

Good luck.<g>

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To: zbyslaw owczarczyk who wrote (247)3/23/2000 10:35:00 AM
From: Andy Yamaguchi
   of 278
ALA announced today that yesterday's report was incorrect. Instead,ALA supports the merger. JDSU/ETEK 's merger is going to be fine.

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To: zbyslaw owczarczyk who wrote (247)3/23/2000 11:53:00 AM
From: Andy Yamaguchi
   of 278
Alcatel Press Statement
DALLAS--(BUSINESS WIRE)--March 23, 2000--In response to a newswire report issued Wednesday, March 22, Alcatel today issued a statement that the newswire report does not accurately represent its position regarding the proposed merger between Alcatel's suppliers JDS Uniphase and E-Tek Dynamics Inc.

Alcatel has not filed an opposition to the proposed merger. Any discussions involving Alcatel with the Justice Department have been to provide factual industry information requested by the Justice Department. Krish Prabhu, Chief Operating Officer of Alcatel Telecom stated, ``We value the relationships we have developed with both JDS Uniphase and E-Tek and have been in discussions with them to ensure that Alcatel's long term interests will be protected. We look forward to continuing good relationships after the merger is completed.'

About Alcatel

Alcatel builds next generation networks, delivering integrated end-to-end voice and data networking solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 23 billion in 1999, Alcatel operates in more than 130 countries.

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To: Andy Yamaguchi who wrote (250)3/28/2000 8:21:00 AM
From: notredame
   of 278
ZO has been clueless on the NNC board for years.

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To: notredame who wrote (251)4/11/2000 6:01:00 AM
From: Glenn McDougall
   of 278
I take exception to your remarks about ZO. He has been a bull on NN no question (I should know I have be a holder of NN for a very long time and on that thread since 96) however in no way does that make him clueless.

Does anyone have the CC and replay #'s...

Thanks in advance


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To: Glenn McDougall who wrote (252)4/11/2000 2:50:00 PM
   of 278
ETEK is a bargain right now and its bouncing. Get in quick. Pile on everybody!

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To: ALTERN8 who wrote (253)4/11/2000 4:16:00 PM
From: Guardian
   of 278
.24 share excluding non-recurring items

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To: Guardian who wrote (254)4/11/2000 11:04:00 PM
From: ms.smartest.person
   of 278
I am disappointed -- was hoping they would split!

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To: ms.smartest.person who wrote (255)4/11/2000 11:57:00 PM
From: Libbyt
   of 278
>I am disappointed -- was hoping they would split! <

I'm not sure if you are kidding....but just in case, when you buy ETEK you are "buying 2.2 shares of JDSU", assuming that the buyout of ETEK by JDSU will be completed without problems. A split of ETEK with the JDSU buyout agreement is not possible.

ETEK is a bargain here at this price, IMO.


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