Merger Rumors Push Ciena Shares Higher Another Cisco?

Ciena Corp. shares (CIEN) soared 18% on Wednesday to a record on speculation that Juniper Networks Inc. (JNPR) may be considering a bid for the maker of fiber-optic equipment.

Ciena climbed $18 to $117.69 on Nasdaq. The stock has doubled this year and has risen more than sixfold since April. Juniper gained $7.63 to $220.50, also on Nasdaq. It’s risen twentyfold since the company went public in June.

Speculation on a possible agreement between Juniper and Ciena “is making the rounds in the investment community,” said Kevin Slocum, a managing director at Wit SoundView, who rates Ciena a “strong buy.”

Juniper makes equipment that routes Internet traffic for telecommunications companies. Ciena’s products boost capacity on fiber-optic networks. Buying Ciena could help Juniper compete with No. 1 Internet equipment maker Cisco Systems Inc. (CSCO), which has acquired several companies to expand into fiber optics. Cisco, of course, has been a premier growth stock in recent years.

“As a combination, [Juniper-Ciena] would be similar in nature to what Cisco is today,” Slocum said. “It’s a combination that defines how people are designing the networks of the future.”

Juniper and Linthicum, Md.-based Ciena already share technology to link their products. The year-old alliance lets the companies sell a package of optical transmission gear to carry Internet traffic with routers to direct it.

Neither Juniper nor Ciena would confirm whether merger talks were taking place.

Takeover speculation has surrounded Ciena since Tellabs Inc. (TLAB) ended its bid for the company in 1998. Tellabs scuttled the $7.1-billion agreement after Ciena warned of lower earnings and failed to get two contracts, sending Ciena’s shares tumbling 70%.

In November, Ciena’s stock got a boost amid talk that Cisco could be planning a bid.