Starting Oct. 20, French telecom-equipment maker Alcatel (Paris)plans to list its hybrid "tracker" shares on both the Paris stock market and the Nasdaq index. It will be the first European firm to issue tracking stocks and is reportedly taking its cue from US telecom firms such as Sprint and AT&T, which did the same for their wireless divisions. The public will be able to buy shares representing 20% of the economic value of the Optronics Division, which Alcatel's CFO Jean-Pierre Halbron says could be valued at 20 to 30 times its sales revenues, or some 8 billion-12 billion euros ($7 billion-$10.5 billion). The stocks are to be denominated as Class O shares. Pre-existing Alcatel shares will be Class A.
By introducing a stock that will "track" the financial performance of the Optronics Division, Alcatel's goal is to enhance market recognition of the division's value. The tracking stock will also increase the firm's ability to respond to strategic opportunities in the optical components industry, while maintaining control over the division (tracking stocks have no ownership rights).
Alcatel Optronics has offices in France, the USA, and Canada. Sales for the first six months of FY2000 approached 161 million euros. Net profit was 25 million euros. The division designs and manufactures optical components, modules, and integrated subsystems-including dense wavelength-division multiplexing active components-for use in terrestrial and submarine optical telecommunications networks. Word also has it that the unit is looking to acquire small leading-edge technology companies in a move related to enhancing manufacturing capacity.--Paula Noaker Powell, Senior Editor