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Just announced this morning -- Alcatel will buy DSC Communications in a $4B stock deal. DIGI shareholders will receive .815 share of Alcaltel's (American Depository Shares) in exchange for one share of DIGI.

This is approximately a 80% premium, based on yesterday's closing price.

Congratulations to DIGI shareholders :-)


TMF Jeanie
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not to be a complete dunce, but what actually happens when a buyout like this occurs? Will an amount that is approximately 80% of yesterday's closing price be "deposited" into my brokerage account? How do i find out when this transaction takes place? If I sell my shares of DIGI tomorrow, do they sell for whatever the market is willing to pay, or does the Alcatel deal come into play somehow. Sorry to ask (perhaps) stupid questions, but I've never owned a stock that was bought out before.

tx in advance!

mr
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Thanx! I've been wondering what happened- my alerts on Quicken told me volume and price were soaring but not why
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According to the official press release, located at:
http://www.alcatel.com/press/current/1998/netgb.htm
as well as http://www.dsccc.com/pr060498.htm, the deal is expected to be completed in about four months, after approval by DSC stockholders, and antitrust waiting periods.
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Perhaps this is a stupid question but here goes anyway...

My understanding is that DIGI is going to be converted into .815 ALA.

DIGI is priced @ 28 15/16
ALA is priced @ 40 5/16

40 5/16 (ALA)
* .815
= 32.8547 > 28 15/16

Shouldn't I be shorting ALA and buying DIGI?
What is the risk here, that the deal doesn't go through? Anything else? Thanks for any insight as to what I am overlooking, because there absolutely has to be something else to this.
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