Lawyers ready to attack CommScope, Carlyle potential hookup

CommScope Inc. (CTV) confirmed reports it is in talks to be acquired by private-equity company The Carlyle Group in a transaction that could be valued at $3 billion, even as at least three firms are considering lawsuits against the CommScope board, alleging that CommScope didn’t properly shop the company before entering discussions with Carlyle or is selling the company for too low a price.
Carlyle is offering to pay $31.50 a share for the company. CommScope stock was trading at just under $30 at press time. The stock had been trading at around $23 per share before the talks were announced. Despite that, the proposed class-action lawsuits said that CommScope had been trading above $32 per share in May and that one analyst valued the company at $36 per share.
Analysts at Robert W. Baird and Longbow downgraded the stock from outperform to neutral and from buy to neutral today.
CommScope said no agreement has been reached with The Carlyle Group. Allen & Co. are advising the infrastructure manufacturer.
CommScope stands to benefit from fourth-generation network buildouts but the company has faced challenges recently. In March, CommScope announced plans to lay off 110 people at its Nebraska manufacturing facility due to high manufacturing costs.
CommScope bought Andrew Corp. for $2.6 billion in 2008, following a 2006 failed attempt by ADC Telecommunications Inc. to buy Andrew for $6.7 billion. ADC earlier this year was bought by Tyco Electronics Ltd. in a $1.25 billion deal.
ADC and CommScope both offer components used in Distributed Antenna Systems and macrocellular networks, which are increasingly being used to add capacity to wireless networks as end users increase their wireless data consumption.
CommScope is also known for its RF coordination efforts at wireless trade shows.