Image source: Alcatel Lucent

What: Shares of networking equipment builder Alcatel Lucent (UNKNOWN:ALU.DL) fell 10.3% in JuneĀ according to data from S&P Capital IQ. Since the company is in the midst of being acquired by Finnish network installation and management giant Nokia in an all-stock deal, Alcatel's price swings run in lockstep with Nokia's moves. The two stocks wavered between breakeven and low single-digit percentage drops in June until the bottom fell out at the very end.

So what: On June 28, activist hedge fund Elliott Management disclosed that it had just bought a 1.3% stake in Alcatel Lucent. The firm is known for taking significant ownership of embattled stocks and pending buyout targets, then pushing for management changes or higher acquisition prices. Elliott doesn't always get what it wants, though, and sometimes the added pressure leads to withdrawn buyout bids rather than bigger payoffs. Now Nokia and Alcatel Lucent investors worry about Elliott's impact on this merger, leading to Alcatel shares falling as much as 3% over the last two trading days in June.

Now what: Elliott has yet to explain why it's buying Alcatel shares, but major shareholder Odey Asset Management already complained that Nokia's buyout terms were unacceptable. When the merger was announced, I also noted that Nokia was risking billions of dollars in shareholder value but no cash at all. The bid looked undervalued even from my distant sideline seat, and now insiders are gathering to complain loudly about the deal structure.

Despite all this noise, Nokia will probably get Alcatel at the announced $16 billion price (adjusted for Nokia's agitated share price moves, of course). The stakes held by Elliott and Odey only add up to 6.3% of Alcatel Lucent's total market value, and the deal only needs support from 50% of shareholders in order to pass.

In the proposed deal, Alcatel shareholders will receive 0.55 Nokia stubs for each of their current shares. In a perfect world, Alcatel shares would trade at exactly 55% of Nokia's value, but investor nerves are changing the math. After a fantastic May but a tough June for both stocks, Alcatel shares are trading 4% below the final deal price.