Click for Market Place
NSN could increase bid for Nortel assets and add more units
Published: 16 July, 2009
Tags >> Canada | Nortel Networks | Nokia Siemens Networks | CDMA | LTE
Pressure from Nortel's shareholders to seek a higher offer than Nokia Siemens' $650m for the Canadian firm's LTE and CDMA assets is mounting, even though no rival proposal has yet been officially put on the table. Now NSN has indicated it could bid for further units, or increase its bid if necessary
Nortel has apparently been trying to drum up higher bids over the past weeks and held a teleconference about CDMA last week, which ABI Research analyst Nadine Manjaro described as a call "to tout Nortel's true value, which will potentially increase bidders. All of the recent press has been more on the negative side so it was an effort to say that even though the company is going through bankruptcy, the assets are still valuable."
Nortel's VP of wireless marketing, Bruce Gustafson, said: "If you're assuming there are no additional bids because there's no public disclosure, you'd be mistaken." According to news agency Reuters, Nokia Siemens is open to acquiring other Nortel assets as they are put on the market. "If other assets come on to the market, we will look at each one for their value and if there is something there we will do a deal," said Sue Spradley, head of NSN North America.
The firm is sufficiently keen to get its hands on Nortel's fledgling LTE business and CDMA carrier contacts to increase its bid if it does encounter rivals at the court supervised auction next week. "That may be a requirement in order to remain in the bid process," said Spradley in a press call. "And we'll do so."
She also said NSN would not cut jobs at Nortel's Ottawa mobile and R&D unit, which employs about 500 people, and indeed would transform it into NSN's global hub of LTE research. In total, NSN has said it will keep about 2,500 Nortel employees worldwide, a third of these in Canada. The firm may face counterbids from private equity firm MatlinPatterson and from at least one group of former Nortel executives. In France, always more inclined to direct action than grumbling behind the scenes, workers threatened to blow up their factory unless they were guaranteed decent severage packages (though the gas cylinders were subsequently found to be empty).
