Industry observers have expected that another company or two would swoop in before the Nov. 20 auction with plans to outbid Ciena. Reuters reported late Wednesday that is the case, with Nokia Siemens Networks (NSN) and a private equity arm of JP Morgan set to challenge Ciena.
Ciena is prepared to pay up to $526 million – the original number was $521 million, but the Ciena’s stock component value has risen – and analysts suspect it can’t afford much more than that. And the thing is, One Equity Partners, given its JP Morgan backing, surely has far greater resources than Ciena. Indeed, JP Morgan is throwing its financial weight around this week, with a $1.7 billion buyout of an investment bank and brokerage in Great Britain.
Meanwhile, NSN has tried before to get its hands on Nortel assets. But NSN has major financial problems of its own and could not beat Ericsson for Nortel’s CDMA and LTE properties. NSN was prepared to pay $650 million; Ericsson won when it plunked down $1.13 billion. Nonetheless, if NSN beats Ciena this time around, it will gain highly coveted optical networking technologies and could even snag carrier customers – including Spain’s Telefonica – in Europe and Asia, according to reports.
Nortel said on Wednesday it will hold the MEN auction tomorrow; the news came a week after the company delayed the original auction to give other entities more time to submit their bids.