NSN ready to offer $810m for Nortel unit
Thursday, 3 December 2009
HELSINKI/NEW YORK, Dec 2 (Reuters): Nokia Siemens Networks will object in US bankruptcy court to Ciena Corp's $769 million bid for Nortel's optical networking and carrier ethernet business, and is ready to raise its offer to $810 million in cash, the company said Tuesday.
US networking gear maker Ciena trumped an offer by Nokia Siemens and its financial partner, One Equity Partners, on November 22 in a three-day auction with an offer of $530 million in cash and $239 million in debt.
The US Bankruptcy Court for the District of Delaware will decide whether to approve the deal Wednesday.
"Along with our expert advisers, we continue to believe that the convertible notes offered by the competitive bidder carry significant risk and should not be valued the same as cash," said Nokia Siemens spokesman Barry French.
To fund the debt portion, Ciena plans to issue $239 million in the form of convertible notes due June 15, 2017, at an interest rate of six per cent to eight per cent.
Nokia Siemens, a 50-50 joint venture of Nokia and Siemens, joins one of Nortel's largest creditors, private equity firm MatlinPatterson, in objecting to the Ciena deal.
Last week, the private equity firm filed a limited objection in court, saying Nokia Siemens' offer exceeded the cash component of Ciena's offer by $200 million.
MatlinPatterson has sought more information from the court on the terms of Ciena's convertible notes.
Ciena shares rose nearly two per cent on Nokia Siemens' plan, and closed up 1.1 per cent at $12.28 on Nasdaq Tuesday.
Last week, Ciena shares fell sharply after it won the auction as investors worried about how the company would integrate the assets, which are expected to double Ciena's size, and cope with an increased debt load.
US networking gear maker Ciena trumped an offer by Nokia Siemens and its financial partner, One Equity Partners, on November 22 in a three-day auction with an offer of $530 million in cash and $239 million in debt.
The US Bankruptcy Court for the District of Delaware will decide whether to approve the deal Wednesday.
"Along with our expert advisers, we continue to believe that the convertible notes offered by the competitive bidder carry significant risk and should not be valued the same as cash," said Nokia Siemens spokesman Barry French.
To fund the debt portion, Ciena plans to issue $239 million in the form of convertible notes due June 15, 2017, at an interest rate of six per cent to eight per cent.
Nokia Siemens, a 50-50 joint venture of Nokia and Siemens, joins one of Nortel's largest creditors, private equity firm MatlinPatterson, in objecting to the Ciena deal.
Last week, the private equity firm filed a limited objection in court, saying Nokia Siemens' offer exceeded the cash component of Ciena's offer by $200 million.
MatlinPatterson has sought more information from the court on the terms of Ciena's convertible notes.
Ciena shares rose nearly two per cent on Nokia Siemens' plan, and closed up 1.1 per cent at $12.28 on Nasdaq Tuesday.
Last week, Ciena shares fell sharply after it won the auction as investors worried about how the company would integrate the assets, which are expected to double Ciena's size, and cope with an increased debt load.