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UBS on a Nortel-3Com Deal
By Mark Evans | July 19, 2007
UBS Securities analyst Nikos Theodosopoulos said if Nortel is going to acquire an enterprise-focused equipment supplier, it will have to do a deal using cash and look at targets with low enterprise value to sales multiples, or companies with a market capitalization of less than $2-billion to $3-billion.
In a report, he said that given Nortel’s focused on enterprise and carrier VOIP - as well as IP-TV - potential targets include 3Com (enterprise data), Sonus (carrier VoIP), and Tellabs (IPTV/access), while Foundry and F5 are possible but less likely.
Theodosopoulos, who rates Nortel a “neutral” with a target price of $26, said Nortel CEO Mike Zafirovski may be looking to make acquisitions as a way to boost Nortel’s stock price, which has dropped about 30% since he took the helm in November, 2005.
Topics: Analyst Coverage |