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I'm curious about a convertible preferred (LUTHP) that was issue by Lucent Technologies in 2002. The preferred is structured in a capital trust, and originally converted to 206 shares of LU.

When Alcatel and Lucent merged, LU common holder were reissued 0.19 shares of ALU. Alcatel shareholders received 1 share of ALU. That worked out to 40 and 60 percent of common equity respectively.

LUTHP shares were not reissued and continue to trade. What I'm wondering is what their current conversion ratio would be.

As I understand it, the trust holds both notes and common, and issues the preferred shares as fractional ownership of both. So, what I'd expect is that the Trust would have been reissued ALU common shares at a 0.19 to 1 ratio and that this would result in the conversion ratio for the preferred changing proportionately (i.e 206*0.19= 39 shares of ALU).

Is this correct? How are these preferreds handled in the case of a merger?

Thanks for any help.
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