As you might have noticed Zhone and Tellium are trying to fast track their merger. They have been pushing hard, which makes me wonder, what’s up? Well this article from the Star-Ledger in New Jersey sheds some light on the obvious upside for the Tellium executives.
bq. Three top executives of optical switch maker Tellium could have $13.7 million in personal loans forgiven once the company’s acquisition by Zhone Technologies is complete, according to a recent filing by the two companies. Under a proposal by Zhone, Tellium Chairman and Chief Executive Harry Carr and two lieutenants would wipe out their outstanding loans and receive a total of $9.7 million in cash to cushion any tax hit from the transactions. The executives — Carr, Chief Financial Officer Michael Losch and Chief Technical Officer Krishna Bala — are expected to leave after the merger and also would be eligible for generous severance packages. [ The Star-Ledger ]
While the Zhone execs have their own reasons to close this sucker deal asap.
bq. The merger gives Zhone, which was starting to run out of cash, more time to operate and pursue new revenue sources, Yankee Group analyst Matt Davis said. But Zhone and Tellium have disparate products, and extra time may not be enough to save Zhone, which is surrounded by competition, he said. [ Oakland Tribune ]
And here we were thinking that in the wake of all the scandals, the telecom executives would have learned a thing or two. What was I thinking!