LONDON, Sept 20 (Reuters) - U.S. IT communications

specialist Viavi Solutions ( VIAV ) is considering whether it could make

another bid for telecoms testing group Spirent Communications ( SPNUF ) if

a takeover by its rival Keysight Technologies ( KEYS ) fails, sources

familiar with the matter said.

Keysight ( KEYS ) outbid Viavi in March with an

all-cash offer valuing Spirent at $1.5 billion, in a

deal which is now in the process of being approved.

But Spirent shares are trading at a 14.5% discount to

Keysight's ( KEYS ) 201.50 pence offer price, which some analysts say

reflects concern over the bidder's ability to get competition

approval, said two people, who spoke on condition of anonymity.

Viavi would have to get consent from UK takeover regulator

to make another bid as UK takeover rules prevent it from doing

so for 12 months from when its previous offer lapsed in May.

Viavi, Keysight ( KEYS ) and Spirent declined to comment.

At the time of its bid, Keysight's ( KEYS ) offer represented a

premium of 85.9% to London-listed Spirent's closing price of

108.4 pence on March 4, well above Viavi's 61.4% premium.

Keysight ( KEYS ) has said it expects its takeover of Spirent, which

would combine "complementary" products and lead to "strategic"

synergies, to be approved before the end of April next year.

Spirent said in August that both it and Keysight ( KEYS ) were

working with U.S. and European authorities to gain anti-trust

approval in expectation of the deal closing before then too.

Keysight ( KEYS ) signed a co-operation agreement which includes a

'Hell-or-High-Water' commitment to support efforts to secure

regulatory approval.

Viavi in its original offer said that relative to Keysight ( KEYS )

it had "limited business overlap with Spirent", and that its

rival's proposed combination would limit customer choice.

Regulators could object to the tie-up as it could lead to

Keysight ( KEYS ) controlling more than 80% of the high-speed-ethernet

(HSE) telecoms testing market, said analysts.

Both companies also overlap in other products areas around

security and navigation and analysts have said Keysight ( KEYS ) may be

required to sell assets to win regulatory approval.

A third person with knowledge of the matter said the deal

with Keysight ( KEYS ) is moving along as Spirent expects and it would

consider disposals, including of its ethernet testing business.

This is part of Spirent's Networking & Security unit, which

its results show represents more than 55% of its revenue.

The third person said that the discount in Spirent's share

price reflects a broader trend among deals which are facing

increased regulatory scrutiny.

Spirent's results in August also show its revenue slipped by

12% to $197.3 million in the first half of 2024, hit by a lack

of customer spending due to an economic slowdown that it expects

to continue into the second half.

Customer hesitation after the news of the takeover has also

delayed contracts, the company said.