Bay Networks is reported to have turned down a takeover offer from telecomms equipment vendor Nortel.
According to US reports, the networking company rejected Nortel?s offer of $27 a share. Ericsson is now believed to be interested too.
Bay Networks, which is believed to have been up for sale since Dave House became chief executive in late 1996, had wanted $35 a share. However, House apparently told analysts last week that it would be open to higher offers.
One analyst who was at the meeting said: ?If an acquisition offer for fair value for the company came over the table, they would consider it strongly, which is essentially saying the company would be for sale for the right price.?
An acquisition by Nortel would have made sense given the telecomms equipment vendor?s IP and data ambitions. The company said it wanted to make a ?right hand turn? in data networks from its traditional voice market. It is currently pushing 'Webtone', its initiative to make the Internet as ubiquitous and reliable as the telephone.
To bolster its data offerings it has been on a buying spree, most recently bagging Avici, a router developer, plus Aptis, a remote access company. Bay Networks would have filled a significant gap.
Nortel and Ericsson are not the only companies to be linked with Bay. Lucent Technologies, the US telecomms equipment giant, was also reported to have courted Bay to help achieve its data ambitions.
A Nortel spokesperson would not comment on the rumours and Bay Networks was not available at press time.
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