Lucent Spin Off Agere Looks To Price

Nearly as turbulent as the stock price of parent company Lucent Technologies Inc., the on-again, off-again IPO pricing for spin-out Agere Systems now seems to be on again.

According to the syndicate desk of lead underwriter Morgan Stanley Dean Witter, the optoelectronics unit is set to price on either Wednesday or Thursday, but under revised conditions. Price shares are now set at $6 to $7, down significantly from last week’s $12 to $14 offer. It also has increased the number of shares offered from 500 million to 600 million.

The Street has been waiting with baited breath for this deal, as it was originally slated to break the $10.6 billion IPO record set last year.

Spinning out Agere (Proposed NNM:AGRA) from Lucent has instead spun a whale of a tale. Not only has the highly anticipated offering been delayed, but it has revised the terms of the deal no less than three times since filing last December.

“Lucent is committed to doing this for a number of reasons,” noted Jay Ritter, an analyst with Morningstar. One of those may be that the once high-flying technology powerhouse is currently mired in debt woes and a soured stock price, down 85% from its 52-week high of $75.87. “The core business is loosing boatloads of money. And Agere, itself, commands a higher valuation,” Ritter said. So while the speed of Agere’s pricing has been set to pause so far this month, Ritter said it’s not a question of if, but when.

Agere isn’t reaping in all of the proceeds from its deal, since it will be selling just half of the shares involved. Morgan Stanley plans to sell the remaining ones, but anticipates offering about 40% of the shares, because it has been buying some of Lucent’s debt over the past few weeks.

Colleen O’Connor can be contacted at Story Feedback.