ALCATEL (BUY) E1BN CAPITAL INCREASE, WHY NOW ? market knew ALU was going to make a capital increase at some point, but timing is clearly shorter than expected (though amount raised is in line). At very first glance, we calulate a 15% dilution (only) and we believe the reasons for such a move are simple: i) take advantage from good momentum and ii) Mr Combes probably believes there won't be a sale of the wireless division to Nokia, as CEO was saying recently we had to expect a capital increase unless co. could sell more assets than its current E1Bn disposals plan (we had a 30% probability for such a deal, market was closer to 50%) TERMS OF THE CAPITAL INCREASE: E955m, 41 rights allow people to ask for 8 new shares at a strike of E2.10, reductible subscription allowed, calendar; from Nov 19th till Nov 29th (i. e settlement mid December)