The story quotes a person familiar with the situation as saying that the Rochester, N.H., company hopes to raise $2.5 bn (£1.5bn) -- a 66 percent premium over it current market value. Based on Tuesday's closing price of $9 a share, Cabletron is worth about $1.5 bn (£0.9bn).
The company has posted net losses in three of the last four quarters, with annual revenue falling between $1 bn (£0.6bn) and $1.5 bn (£0.9bn) over the last three years.
In the third quarter ended Nov. 30, Cabletron reported sales of $329.9m (£200m), compared with $331.8 m (£202m) in the third quarter of the prior year. Net loss for the quarter was $21.2m (£12m), or 12 cents a share, before special charges of $63.8 m (££39m). In the year-ago quarter, Cabletron had net income of $19.9 m (£12m), or 12 cents a share.
The Post reported that Cabletron has been the subject of speculation for the past week after Tucker Anthony Research analyst William Becklean predicted the company would be snapped up within five years. In response, Cabletron-co-founder and CEO Craig Benson told the Boston Globe that the 15-year-old company was not for sale.
Cabletron and Merrill Lynch officials declined to comment on reports of a possible acquisition.