Lucent Technologies has averted a potentially embarrassing delay of its shareholder vote on a merger with Alcatel, settling two suits by shareholders who said the deal doesn't maximize shareholder value.
Lucent and Alcatel agreed in April to merge into a global communications vendor that would have about US$25 billion in annual revenue. Both companies plan to hold shareholder votes to approve the deal on Thursday.
Plaintiffs in Resnick vs. Lucent Technologies wanted to postpone Lucent's vote, and the company was due at a hearing Wednesday in the Superior Court of New Jersey in Union County to fight that move. Another group of shareholders pursuing a similar suit, Asa R. Maley Trust vs. Lucent, also would have joined the hearing. Now Lucent won't have to face the danger of a legal entanglement the day before its planned vote.
Both suits were intended as class actions on behalf of owners of Lucent stock. Terms of the settlement Lucent reached with them will be disclosed later, the company said in a filing to the U.S. Securities and Exchange Commission on Friday.
The Lucent-Alcatel deal would be one of the biggest shifts yet in the consolidation of both service providers and vendors in the telecommunications industry. Both the U.S. Federal Trade Commission and the European Commission have approved the plan, but it still faces opposition from some investment firms and needs the blessing of the Committee on Foreign Investment in the U.S. Lucent is based in New Jersey. The merged company, to be called Alcatel Lucent, would have its headquarters in Alcatel's base of Paris.