December 2, 2009UPDATED Reuters is reporting that Nokia Siemens Networks plans to petition the courts overseeing the Nortel bankruptcy proceedings to reject Ciena's winning bid for the Metro Ethernet Networks (MEN) group when they hold joint hearings today. And it's willing to put up $810 million in cash to make it worth the courts' consideration, according to the news service.
Ciena was declared the winner of the auction for most of the optical and Ethernet assets within MEN with a bid of $769 million -- $530 million in cash and $239 million in convertible notes. The auction began on November 20 and lasted until the night of November 22.
Reuters quotes NSN spokeman Barry French as asserting the fact that Ciena's notes carry some risk put the true value of the winning bid in question.
Reuters and other media outlets also say that NSN bid $770 million for Nortel's MEN assets, which gives the initial appearance that Nortel and its creditors left $1 million on the table. However, Nortel's stalking horse agreement with Ciena provides Ciena with a $21 million breakup fee should another party end up with MEN. Thus, NSN would have had to exceed any Ciena bid by at least that amount to offer a better deal. An $810 million bid would do the trick.
The court hearings are expected to begin at 11 AM EST in Delaware. However, the MEN assets are not the only sale on the courts' docket. Nortel's sale of its GSM/GSR assets to Ericsson and Kapsch CarrierCom AG also will be reviewed. Therefore, the session may not end until well into this afternoon.
