Updated from 10:20 a.m. EST

Lucent Technologies

(LU)

said Monday that it had agreed to acquire

Ortel

(ORTL)

, a developer of lasers that help increase the bandwith of cable television networks, in a stock deal that the companies valued at nearly $3 billion.

Although analysts praised the deal, investors were disappointed that Lucent was not paying a premium for Ortel.

Under the terms of the deal, each share of Alhambra, Calif.-based Ortel will be converted into 3.135 shares of Lucent. Based on Lucent's closing stock price of $57 on Friday, the acquisition would be valued at about $2.95 billion, or $177.125 per fully diluted Ortel share. Ortel closed at $177.125 on Friday.

Lucent was down 1 5/16, or 2%, at 55 11/16 in midday trading, while Ortel fell 12, or 7%, to 165 1/8. (Lucent closed down 3/8, or 0.66%, at 56 5/8. Ortel closed down 10 7/16, or 5.9%, at 168 1/16.)

Jeff Baum, a spokesman for Lucent, said that despite a lack of a premium on Ortel's share price, the terms of the deal were fair.

"We feel we're paying a fair price, which is certainly in line with the market valuation for other optoelectronic component companies," Baum said.

Ortel did not immediately return a call for comment.

Analysts noted that a recent steep run-up in Ortel's share price meant that the premium was already priced into the acquisition.

"This stock has had a tremendous run-up over the last three months -- really tremendous," said John Butler of

Prudential Securities

. "It is now trading at 25 times forward 12-month revenues."

Ortel's stock price has soared more than fivefold from about $30 at the start of November.

Butler, who rates Ortel a hold because of the sharp increase in the stock price, said that even without a premium, the deal still offered an excellent exit strategy for Ortel, which is one of the few remaining stand-alone players in the rapidly consolidating optoelectronic components sector. Prudential has not done any underwriting for Ortel.

Sector leader

JDS Uniphase

(JDSU)

has recently made a string of acquisitions, buying

E-Tek Dynamics

(ETEK)

for $15 billion and

Optical Coating Laboratory

for $2.8 billion.

As for Lucent, the world's biggest telecommunications equipment maker, Paul Silverstein, an analyst at

Robertson Stephens

, applauded the acquisition of Ortel, which will be merged into Lucent's microelectronics group.

"What you have is a market segment characterized by phenomenal demand and a leading competitor enhancing its obviously strong position," Silverstein said, referring to Lucent. Robertson Stephens rates Lucent a buy and has not done any underwriting for the company.

Lucent said the acquisition would enable it to speed up the development of cable television's capabilities as a two-way interactive medium.

"This acquisition marries our communications optoelectronics leadership with Ortel's expertise in optoelectronics for cable TV and positions us to support the converging needs of these markets," said John Dickson, executive vice president and chief executive of

Lucent's Microelectronics and Communications Technologies

unit, in a statement.

By acquiring Ortel, Lucent will also benefit from the company's approximate 13%-18% holding in optical networking switch-maker

Tellium

, which is expected to go public sometime in the next six months. And the purchase will also increase the value of the microelectronics group should Lucent decide to create a tracking stock for the unit, a possibility reported in the media.

Lucent said the deal is expected to result in a one-time charge against earnings for in-process research and development during the fiscal third quarter.

Excluding in-process research and development and the amortization of goodwill, the purchase is expected to be a penny dilutive to Lucent's earnings in fiscal 2000. Including these costs, the acquisition is expected to be about 8 cents dilutive to earnings in the year.

Lucent, which is based in Murray Hill, N.J., expects the acquisition to be completed in the quarter ending June 30.