Ericsson: to takeover or be taken over?

NEWS Contradictory rumours are doing the rounds this morning over the future of Ericsson, with some in the industry believing it's set to go on a spending spree, while others claiming it is a possible takeover target itself. Ericsson's shares rose nearly nine per cent yesterday as the latter opinion gained precedence - with Cisco's name being linked with the company - despite most analysts saying such a deal is unlikely. The speculation was triggered by the comments of the chief executive of the Alecta pension fund, Ericsson's third largest share holder. Lars Otterbeck warned that the troubled telco would have to scrap its planned $3bn rights issue if its share price continued to fall and added: "The key issue is whether Ericsson becomes a takeover target or whether it launches a bid itself." The rights issue was planned back in April, when the company's shares were double their current level. However, Ericsson is playing down the rumours. Chairman Michael Treschow said yesterday: "Ericsson has no negotiations regarding takeover or other similar alliances."