Shares of Ciena Corp. jumped 20 percent on Friday morning after Tellabs Inc. agreed to pay $4.9 billion for the telecommunications equipment maker.Tellabs (TLAB) cut its bid for from an earlier offer of $7.1 billion after AT&T (T) announced it won't use Ciena technology. Ciena's shares then plunged 45 percent.
Under the terms of the amended agreement, each outstanding share of Ciena common stock will be exchanged for 0.8 share of Tellabs common stock, the companies said. The earlier deal called for a one-for-one stock swap. The boards of directors of both companies have approved the renegotiated deal and unanimously recommend approval by their respective stockholders.
Ciena rose 6 3/16 to 37. Tellabs slipped 6 11/16, or 11 percent, to 51 1/18 in early trading.
Both companies have special stockholder meetings scheduled for Sept. 9 to vote on the merger but said it's likely that the meetings will be postponed to give stockholders time to review the new provisions.
Ciena makes devices that enable fiber-optic lines to carry more data. Lisle, Ill.-based Tellabs sells switching equipment to route large amounts of data.
Written By Steve Gelsi