* Meeting with buyers this week - sources
* Seeks indicative bids by early May - source
* Private equity firms, SEN seen as potential buyers-sources
* Business could fetch around $1.2 bln - source
* Alcatel-Lucent shares extend gains
(Adds background, details, share price)
By Nicola Leske and Nadia Damouni
FRANKFURT/NEW YORK, April 26 Alcatel-Lucent
ALUA.PA is holding meetings in San Francisco this week with
prospective suitors to scout out buyout interest in its $1
billion plus enterprise business, several people familiar with
the matter said.
A slew of private equity firms are expected to be among the
potential buyers taking meetings with the telecom equipment
maker, the sources said.
The few strategic parties that could show an interest
include Cisco (CSCO.O), Hewlett-Packard (HPQ.N) and Avaya
[AVXX.UL], these sources said.
Siemens Enterprise Communications (SEN), which is 51 percent
owned by Los Angeles-based private equity firm Gores Group, is
considered to be the frontrunner in the process, two of the
sources said. German engineering group Siemens (SIEGn.DE) owns
the rest and would likely have a say in any decision to buy.
A spokesman for Gores Group declined to comment.
Alcatel-Lucent and SEN also declined comment.
Shares of Alcatel-Lucent extended gains to trade 2.4 percent
higher at 4.276 euros. France's CAC 40 index .FCHI was up 0.4
With Ben Verwaayen taking over the helm of Alcatel-Lucent in
September 2008 to rescue the Franco-American company after a
value-destroying merger in 2006, the sale of the enterprise
business is part of the company's effort to focus on its core
operations, a source close to the situation said.
"This was always a non core asset and they are looking to
move on," the source said.
The potential sale, which one source pegged at about $1.2
billion, comes in the third and last year of Verwaayen's
promised turnaround of the group.
Qatalyst Partners, founded by former Credit Suisse
investment banker Frank Quattrone, is advising Alcatel-Lucent on
the sale, the sources said.
The enterprise business, being sold as a package, including
a contact center software business called Genesys, acquired by
Alcatel in 2000.
"It's a business that is basically designed to work
agnostically with anyone's hardware," one of the sources said.
The other businesses include Alcatel-Lucent's IP Telephony
and phone voice system, similar to Avaya's core business, and an
Ethernet switching business comparable to HP's networking
switches unit formerly called ProCurve.
Alcatel-Lucent has asked for indicative bids by early May
and has requested cash offers, a second source familiar with the
Although the deadline could move around depending on the
number of parties expressing interest, the first source said.
Alcatel-Lucent could also struggle with valuation, as the
assets may have been more relevant had they been sold three
years ago, the same source said.
Genesys is considered an attractive business, generating
approximately 75 percent of the overall enterprise business, the
second source said. Although the other two businesses would be a
tough sale on their own, one of the sources said.
"The legacy voice business is very European focused, it is
all unionized labor, it is all European geography, it is very
expensive to fix," the source said.
The Wall Street Journal reported earlier this month that
Alcatel-Lucent was exploring a sale of the enterprise business
that sells phone and telecommunications gear to corporations.
(Addtional reporting by Jens Hack in Munich; Editing by Jon