PairGain Stock Rises on Report of a Takeover

PairGain Technologies Inc. shares climbed 15% Thursday in heavy trading amid speculation that the phone-equipment maker may be bought by another company, analysts said.

PairGain shares rose $2.75 to $20.88 in trading of 17.2 million shares, almost quadruple the three-month daily average of 4.47 million. The stock was the third most active in U.S. markets. Trading in PairGain options also surged.

Investors speculated that PairGain, which makes products that transmit voice and data at high speeds over traditional copper phone lines, could be bought by Lucent Technologies Inc., which makes equipment for phone networks, analysts said.

“There are takeover rumors flying all over the place,” said Tim Luke at Lehman Brothers Inc. “I heard Lucent could buy them, but I don’t believe it.”

PairGain officials declined to comment but admitted their company could be attractive to potential buyers. Lucent declined to confirm or deny the speculation.

“We’ve made no announcements about PairGain Technologies, and we don’t comment on rumors or speculation,” said Bill Price, a Lucent spokesman.

Other analysts also said they were skeptical about a Lucent acquisition. Lucent earlier this month agreed to buy Octel Communications Corp., the world’s top voice-mail company, for $1.8 billion in cash. That transaction will wipe out Lucent’s cash reserve, analysts said.

Lucent shares fell 56 cents to $84.88.