Pirelli and Alcatel Reportedly Bidding for Lucent Optical Unit

Pirelli and Alcatel, two European makers of telecommunications equipment, each bid more than $4 billion for Lucent Technologies Inc.’s optical fiber and cable unit, people familiar with the companies said.

Money-losing Lucent put the unit up for sale more than two months ago, partly to raise cash to repay debt. The company needs $2 billion by October to satisfy terms of a $6.5-billion bank line of credit and to complete the spinoff of Agere Systems Inc., its chip-making business.

Lucent, the biggest U.S. maker of telephone equipment, may get as little as half the $8-billion price forecast last month by some analysts for the optical-fiber unit because demand from telecommunications companies has fallen.

The sale is “being driven by the fact that they’ve got to raise funds,” said Jim Kedersha, an analyst at Adams Harkness & Hill Inc., which has a “neutral” rating on Lucent shares.

With the fiber unit, Pirelli or Alcatel would become the world’s second-largest maker of glass and cable used in telecommunications networks. Pirelli is Europe’s biggest cable supplier, while Alcatel is Europe’s fourth-largest maker of phone equipment.

Separate talks to combine Alcatel and Murray Hill, N.J.-based Lucent ended earlier this week after the companies couldn’t agree on management control of the combined business.