Juniper, Redback Discussed Merging

Juniper Networks Inc. and Redback Networks Inc., two upstart makers of computer-networking gear challenging Cisco Systems Inc., have informally discussed merging, a Juniper director said. The talks broke off two weeks ago, said Richard Kramlich, a co-founder and general partner of New Enterprise Associates, which invested in Juniper before it went public in June 1999. Kramlich said he didn’t know the details of the discussions. Such a transaction would combine Juniper’s high-capacity gear for directing Internet traffic with Redback products that handle streams of traffic on data and optical networks. Redback has a market value of about $4.18 billion, while Juniper’s is $18.3 billion. Venture capitalist Vinod Khosla of Kleiner Perkins Caufield & Byers sits on both companies’ boards. “Informally, they did engage in merger talks, but they’re not going to merge,” Kramlich said. “They had a discussion and each company is following its own business pursuits. It looks like that’s the way they’re going to maintain it. I wasn’t part of the survey team that did the work.” Juniper shares rose $5.02 to $58.63 and Redback climbed 45 cents to $27.31, both on Nasdaq. Both companies are based in Sunnyvale, Calif., and both stocks have fallen more than three-quarters from their highs.