A desperate Lucent Technologies may move from postponing to canceling the $6.5 billion IPO of its spinoff, Agere Systems Inc., its vice chair says. The waffling comes after Lucent cut the offering's share price and upped the number of shares.
Agere, which manufactures semiconductors and fiber optic components, will take on $2.5 billion of the debt that Lucent is so eager to shed through the IPO, leading to a big enough concern to delay the IPO until next week. But Lucent Vice Chairman Ben Verwaayen told Bloomberg Lucent will wait several days before deciding whether to launch at all.
Meantime, Agere originally had expected to release 500 million shares of Class A common stock at $12 to $14 per share, through Agere and Morgan Stanley, its underwriter. Yesterday, it halved the price to $6 to $7 per share and upped the potential number sold to 600 million.
Observers say that even at $8 a share, Agere's part of the sales would only reach $2.4 billion - a lot to swallow, given the amount of Lucent's debt it will assume.