The initial public offering of

Lucent

(LU)

spinoff

Agere Systems

will turn out to be much smaller than originally anticipated as the company filed this morning to reduce the price range of the deal to between $6 and $7 a share, enabling the company to raise $4.2 billion if the deal can get completed.

The offering, originally scheduled to be priced this week, now won't come to market until next week. The company will be selling, according to the filing, 600 million shares, up from the 500 million shares recently planned and the original expectation of 360 million shares.

As the IPO's lead underwriter

Morgan Stanley

(MWD)

has

struggled to find buyers, and the price range of the deal has fallen from $16 to $19 a share. The range has already been reduced to $12 to $14.

According to the filing, Morgan also canceled plans for an exchange of debt for Agere shares with Lucent, leaving the investment bank with roughly $1.6 billion of Lucent debt. The initial plan had been for Morgan Stanley to swap the debt for shares, selling them in the IPO.

If Morgan can push the issue out the door, it may set up another swap for Agere equity, taking up to 90 million shares.

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