Ciena says it has evidence that a rival telecom-equipment firm helped sabotage the company's now-canceled merger with Tellabs.
The claims were included in the firm's most recent quarterly report, filed on Monday with the Securities and Exchange Commission. In the report, Ciena (CIEN) said it has evidence that "a competitor may have engaged in targeted and legally questionable activities in order to undermine the company's market position as well as the proposed merger with Tellabs."
The report does not name the competitor, but a Washington Post article says that Ciena is pointing the finger at Lucent Technologies (LU).
According to published reports, the evidence includes an anonymous email message sent to Tellabs (TLAB) in August, which accused Ciena of falsifying test results of its fiber-optic networking products. Ciena reportedly traced the message back to a Lucent address, said The Washington Post.
Ciena's quarterly report also suggests that "one or more" short-sellers engaged in "orchestrated activities" to influence media coverage of Ciena's business setbacks this summer, in order to further drive down the company's stock price.
Ciena officials could not be reached for comment. Lucent spokesman Bill Price says his company hasn't received any word from Ciena regarding the email or other evidence of wrongdoing. Lucent says it has not engaged in any illegal activities.
"I can tell you emphatically that Lucent's code of conduct is that we rely on the merits of our products and our people to compete, and not on unfair or unethical practices," said Price.
Ciena and Tellabs canceled merger plans on Monday, saying that Tellabs shareholders were unlikely to approve the deal. The firms had previously been forced to reduce the value of the merger from US$7 billion to $4.6 billion, following a series of events that caused Ciena's stock to tumble more than 70 percent.
The troubles began in August, when Ciena warned Wall Street that its third-quarter earnings would be below expectations. Later that month, Ciena, which makes gear that increases the capacity of fiber-optic networks, lost a major potential customer when AT&T (T) said it had stopped testing Ciena's products. Then, Ciena lost a contract with telecommunications company Digital Teleport. The string of bad news caused Ciena's stock to collapse.
Ciena said in its quarterly report that it hasn't reached any conclusions from the evidence it gathered, and the firm hasn't yet requested any action by the SEC. But it appears from the report that Ciena suspects more than just bad news was at work to derail the merger, and the company "is continuing to investigate."
