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Fore surges on billion-dollar buyout

Shares in Fore Systems jump as U.K.-based General Electric Company (GEC) buys the networking equipment maker to beef up its IP networking and telecom business.

Shares in Fore Systems surged today as U.K.-based General Electric Company (GEC) acquired the networking equipment maker in a $4.5 billion deal to beef up its IP networking and telecom business.

GEC, which is not related to U.S.-based General Electric, will pay $35 a share for Pittsburgh, Pennsylvania-based Fore, which makes ATM (asynchronous transfer mode) and other networking equipment, according to a Fore statement. That price per share is about 43 percent more than Fore's Friday closing price.

The merger, financed with cash and bank resources, is expected to close by the end of the month, the company said. At that time, Fore will become a subsidiary of GEC. Fore has 2,000 employees.

Fore Systems stock today was the most actively traded issue on the Nasdaq market with 42.8 million shares changing hands. Shares gained more than 37 percent to a new 52-week closing high of 33.75, rising at one point as high as 34.625.

GEC is a global engineering firm focused of late on beefing up its IP networking and telecommunications business.

The firm, which is making moves to delve further into the U.S. voice and data networking market, plans to use Fore's IP and ATM switching equipment with its Marconi Communication's call control and intelligent networking products.

Marconi, a broadband provider and network integrator, is a subsidiary of GEC, which also bought Cleveland, Ohio-based telecommunications networking equipment provider Reltec last month in a $2.1 billion deal.

Fore, which provides equipment that serves as corporate and Internet service providers' backbones for carrying data, reported revenues of $632 million for the year-ended March 31, 1999, an increase of 35 percent from 1998.

GEC stock is traded on the London Stock Exchange.