Mark Nov. 13 as the date insolvent Nortel Networks presumably will sell its last large, and among its most-prized, assets.
Bankruptcy courts in the United States and Canada have scheduled the auction of Nortel’s Metro Ethernet Networks (MEN) unit for Nov. 13, now that Ciena Corp. has been approved as the initial bidder. Ciena’s opening bid will total $521 million.
Other vendors hoping to get their hands on MEN have until Nov. 9 to file a counter-offer to Ciena’s. There’s speculation that Ericsson or Nokia Siemens Networks, both of whom have fought before over Nortel properties, could face off against Ciena. Ericsson earlier this summer won the bidding war for Nortel’s CDMA technologies after much presumption that Nokia Siemens would walk away the victor.
The precedent, then, for a stalking-horse bidder to not emerge as the actual auction winner is one to keep in mind. Just because Ciena plans to plunk down $521 million doesn’t mean another company won’t beat that amount, or that Ciena won’t have to increase its bid and potentially have to drop out if the number goes too high. Still, there’s enough possibility over a Nortel-Ciena combo that the companies had to get judges’ approvals should Ciena take MEN. The original terms called for a $16 million break-up fee and $5 million in expenses for Ciena if the deal were to fall apart, but the courts didn’t like those conditions. Nortel won’t say what the revised terms are, although modifications will be publicly available in the court orders.
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July 16 2019 @ 17:01:50 UTC