Alcatel-Lucent shares rally on CEO speculation

PARIS (Reuters) - Alcatel-Lucent (ALUA.PA) shares rose on Wednesday for the second day running on the back of a report that said Mike Quigley, the group's highly-regarded former chief operating officer, could take the reins as chief executive.

Quigley, replacing outgoing chief executive Patrica Russo, would return to the telecoms equipment group at a difficult time.

Alcatel-Lucent has issued a string of profit and sales warnings ever since it started as a combined unit in December 2006 as the merger spooked customers and weakened its ability to compete at a time when price pressures had never been stronger.

The stock, which fell to a six-year low in March, was the biggest gainer among French CAC-40 blue chip stocks and rose as much as 6.35 percent.

By 1212 GMT, the shares, which had lost more than 22 percent since the beginning of the year, were up 4.03 percent at 4.26 euros.

The stock rallied strongly on Tuesday after the French weekly Le Canard Enchaine said Quigley could get the top seat.

Alcatel-Lucent declined to confirm the nomination and Quigley could not be reached for comment.

Stuart Jeffrey, an analyst at Lehman Brothers said: "Mike Quigley knows Alcatel pretty well, he knows the industry very well and he has always come across well to investors."

"I think investors will feel a little bit more comfortable with someone like him at the helm than the unknown...And then there is the sense that Quigley is quite a pragmatic chap."

Before the merger, Quigley was seen as the anointed successor to Serge Tchuruk, then Chief Executive and Chairman of Paris-based Alcatel.

But he was passed over, as several others before him, when Lucent's chief Patricia Russo, head of Lucent, was chosen to head the group as chief executive.

Russo and Tchuruk resigned last month after Alcatel-Lucent unveiled a sixth consecutive quarterly loss.

Other potential successors to Russo mentioned include former BT head Ben Verwaayen and former French Finance Minister and France Telecom head Thierry Breton.

On Monday, Tchuruk said in an interview with Le Figaro that a strong telecoms background would be essential while Alcatel said it could consider external candidates.

On Tuesday, a source close to the group said the appointment committee could name a former Alcatel or Lucent employee.

Quigley, who left Alcatel-Lucent in 2007, had worked for Alcatel for more than 20 years.