Just because Ciena Corp. (CIEN) won Nortel Networks’ Metro Ethernet Networks (MEN) auction last week doesn’t mean the deal is sealed.
As Ciena and Nortel were headed to bankruptcy court on Wednesday to secure approvals for the assets transfer, a rival put a kink in the works: Nokia Siemens Networks said it will make an all-cash offer of $810 million for Nortel’s highly coveted optical networking unit.
Ciena beat out Nokia Siemens for the Nortel division with a bid of $530 million in cash and $239 in convertible notes. But Nokia Siemens, the struggling joint venture between Nokia Corp. and Siemens AG, is fighting back. A spokesman confirmed to MarketWatch the company will make a bid that “is substantially better than that of the initial auction winner, particularly given the all-cash nature of our offer.”
MEN ranks among Nortel’s most-valuable business units and has been the object of possible takeovers for more than a year. For a while last year, China-based vendor Huawei was considered to be among the lead contenders. But Nortel executives postponed planned sales of the MEN division until after the company filed for bankruptcy on Jan. 14, 2009. Since that date, the telecom equipment maker has auctioned off its assets piece by piece, at prices far lower than the properties’ actual worth.
And despite Wednesday’s turn of events, Ciena’s stock was trading up more than 5 percent. By 11:48 a.m. Eastern, it had reached $12.94.