Metalink surges on Lucent acquisition talk

Metalink Ltd (Nasdaq: MTLK) jumped 17 percent Monday on news Lucent Technologies (NYSE: LU) is in initial talks to acquire it.

Shares in the Israeli-based company were up 8 15/16 to 37 1/2. The company, which makes chip sets allowing digital transmission of voice and data over copper communications lines, just went public in December.

According to the financial newspaper Globes, the two companies signed a non-disclosure agreement, a prerequisite for acquisition and investment talks. The news was reported in its Sunday evening edition.

Officials from both companies were not immediately available for comment.

Metalink's main competitors for the company include Conexant Systems Inc. (Nasdaq: CNXT) and Level One Communications Inc., a unit of Intel Corp. (Nasdaq: INTC).

Lucent, which announced plans to spin off a new company in the hot area of enterprise networking in March, has been honing its focus on fast-growing areas like optical networking, Internet infrastructure, wireless, semiconductors, optoelectronics, Web-based enterprise solutions, and professional design and consulting services. The acquisition would improve its standing against competitors such as Nortel Networks (NYSE: NT) and Cisco (Nasdaq: CSCO).

-- Reuters contributed to this report.