Bay Networks Rejects NorTel Purchase Bid

Bay Networks Inc. told analysts it rejected an acquisition offer from Northern Telecom Ltd. as too low but would consider higher bids from NorTel or other suitors. “It’s no longer a question of whether they [Bay] are for sale; it’s now a disagreement over price,” said Kevin Fong, a partner with venture capital firm Mayfield Fund. Fong said he spoke to Bay executives about the offer. Chief Executive David House told Wall Street analysts at a meeting last week that the Santa Clara-based computer-networking equipment company would let shareholders decide whether to sell, according to two analysts who attended the meeting and asked not to be identified. A spokesman for Bay declined to comment. Northern Telecom and Lucent Technologies Inc., the two biggest makers of telecommunications equipment, are acquiring networking companies to expand their share of the Internet market. Bay’s shares fell 31 cents to close at $24 on the NYSE.