November 18, 2009Ciena is going to have to pay more if it wants Nortel's optical and Ethernet assets.
Nortel has announced this Friday, November 20, 2009, as the auction date for the assets for which Ciena earlier bid approximately $521 million. That means at least one other qualified bidder was found yesterday.
No word yet on who the competition is -- Nortel source says it's a private auction, so their lips are sealed. Naturally, I'll keep digging. Meanwhile, care to make any guesses?
UPDATE 11/19 11:00 AM EST Reuters is reporting that Nokia Siemens Networks paired with private equity firm One Equity Partners to submit a qualified bid. One Equity manages $8 billion for JPMorgan -- which is a lot of fire power for Ciena to overcome. Ciena's stock rose $0.40 to $14 in after-hours trading yesterday when it became clear that someone else might buy MEN. It will be interesting to see how NSN fairs today.
UPDATE 11/19 9:41 AM EST Paul Bonenfant of Morgan Keegan issued a note on Opnext in light of a "reported NSN bid for Nortel optical business." He doesn't see a Nokia Siemens Networks acquistion of MEN as a positive for Opnext, since an outside supplier of 40G and 100G technology would no longer be necessary.
Meanwhile, I'm in touch with Nortel media relations to find out just how this auction process works. Not surprisingly, the judge doesn't stand up with his/her gavel and start yodeling. In fact, the judge isn't involved at all in the actual bidding process. Apparently, ground rules are first set, then Nortel and the attending creditors identify the initial high bid. The other potential bidders decide how they want to respond. New bids are then assessed by Nortel and the creditors. Other rounds ensue as necessary. My media relations contact said that one of the previous auctions required six rounds "and that took all day." The judge gets involved a few days later at a hearing to approve the winning bid.
