Alcatel-Lucent up on Chinese bid talk, upgrade

PARIS, Aug 26 (Reuters) - Alcatel-Lucent ALUA.PA shares jumped 13 percent on Wednesday as traders cited market talk of a possible bid for the Franco-American company by a Chinese manufacturer of telecom gear and a rating upgrade by Natixis analysts.

An Alcatel-Lucent spokeswoman declined to comment on the share price move.

Alcatel-Lucent has been struggling to turn a profit since its creation in a merger in 2006 that was supposed to help it cut costs and better compete with the new generation of Chinese gear makers including Huawei [HWT.UL] and ZTE 0763.HK, which have a much lower cost structure.

A Chinese bid for Alcatel-Lucent could run into regulatory problems because of its role via Bell Labs as a government and military contractor in the United States.

Natixis raised its rating on Alcatel-Lucent to “buy” from “reduce” and increased its price target to 3 euros per share from 1.80 euros.

(Reporting by Leila Abboud and Dominic Lau; Editing by James Regan)

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