Alvarion plus its patents headed for Valley Telecom

Valley Telecom sweetened its deal for Alvarion, agreeing to pay more for the struggling company and assume ownership of its patent portfolio.

A district court in Tel Aviv, which is overseeing Alvarion's receivership, will have the final say on whether the offer is accepted. In the meantime, the court granted a motion to extend Alvarion's operations through Sept. 15 while the company works to settle its sale to Valley Telecom. The court also approved Alvarion's efforts to fund its appeal to Nasdaq for continued listing of the company's shares.

Rosh Hayain, Israel-based Alvarion has been in receivership since mid-July. On Aug. 25, Alvarion's court-appointed receiver Yoav Kfir asked the District Court of Tel Aviv-Yaffo to approve the company's acquisition by Israeli consortium Valley Telecom for $1.5 million plus milestone payments of at least $1.8 million payable within one year.

After Kfir sought approval of that offer, other bidders stepped up with revised proposals for Alvarion, leading Kfir to conduct another round of negotiations. Valley Telecom again came out on top, with a revised proposal to pay a minimum of $5.8 million for all of Alvarion's assets, and, should a creditors' settlement be approved, at least 75 percent of the company's outstanding ordinary shares, as well as additional contingent payments. On Aug. 29, Kfir asked the court to approve Valley Telecom's revised proposal.

Valley Telecom's previous offer excluded Alvarion's patents, which Wi-LAN had offered to acquire for $600,000. Valley Telecom's new offer includes the acquisition of Alvarion's patents, for which the buyer will pay about $690,000 by the end of 2013. Should the patents be sold off over the next two years, the court-appointed receiver will receive 50 percent of the net proceeds from that sale.

Under terms of the latest proposal, Valley Telecom will assume management and financing of Alvarion's operations on Sept. 15. Akin to its earlier offer, Valley Telecom proposed that the receiver receive newly issued shares representing 15 percent of the company's outstanding ordinary shares, while the company's existing ordinary shares will be diluted to represent a maximum of 10 percent of its outstanding ordinary shares.

Meanwhile, Alvarion is still wrestling with a potential delisting from Nasdaq. Alvarion's stock must trade at least $1 for at least 10 consecutive business days by Oct. 23 if the company is to retain its listing.

Alvarion was an early pioneer in WiMAX technology but struggled as mobile operators began adopting LTE rather than WiMAX for broadband services. The company subsequently diversified into other businesses such as distributed antenna systems (DAS) and Wi-Fi and sold off its WiMAX business.

For more:
- see this Alvarion release and this release
- see this Bloomberg article

Related articles:
Alvarion seeks OK of $1.5M buyout offer, patents still up for grabs
Telrad lays out WiMAX-to-LTE migration path
Alvarion may have a suitor but faces Nasdaq delisting
All Alvarion employees given layoff notices
Alvarion sells WiMAX business to Telrad for $6.1M

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