UPDATE 1-Ciena takes Nortel unit auction to 2nd day -sources
November 22nd, 2009 | by admin |* Optical networking, carrier ethernet unit sale continues
* Nokia Siemens/One Equity Partners also bidding -source
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NEW YORK, Nov 21 (Reuters) - The auction for NortelNetwork’s optical networking and carrier ethernet business wentinto a second day on Saturday, after Ciena (CIEN.O ) called for abreak in the auction late on Friday, two sources said.
Last month Nortel Networks Corp, the bankrupt Canadiantelecommunications equipment maker, said that Ciena’scash-and-stock bid, worth some $522 million, would be thestalking horse offer for these assets. [ID:nN07462090]
Earlier this week another source familiar with the sale toldReuters that Nokia Siemens Networks and private equity firm OneEquity Partners had also jointly bid for the assets.[ID:nN18125510]
Ciena’s stock fell sharply after it revealed the proposeddeal last month, with analysts saying the rising price andpossible equity side of the deal would weigh on investors minds.
Ciena’s offer consisted of $390 million cash and 10 millionCiena shares.
Analysts and investors have been concerned about Ciena’soffer because the U.S. networking gear maker would have to takesignificant pains to integrate the Nortel assets.
Although the assets are a good fit for Ciena’s portfolio,the deal would weigh down operations, they said.
Nortel, once North America’s biggest telecoms equipmentmaker, filed for bankruptcy protection in January. It is sellingoff its assets rather than trying to restructure.
One Equity manages $8 billion for JPMorgan (JPM.N ) inprivate equity investments.
Nokia Siemens is a 50-50 venture of Nokia (NOK1V.HE ) andSiemens (SIEGn.DE ). (Reporting by Anupreeta Das; Editing by Jon Boyle)
