The bidding war for Nortel Networks' wireless assets gained another major participant, with Swedish giant Ericsson acknowledging a bid for the bankrupt company's CDMA and LTE operations. According to a report in the Globe and Mail, which cited unnamed people familiar with the bidding process, Ericsson entered a $730 million bid. However, Ericsson representatives declined to comment on that figure.
The Ericsson bid tops the two formal bids that have been made so far. Private equity firm and Nortel creditor MatlinPatterson has submitted a $725 million bid, topping Nokia Siemens Networks' opening bid of $650 million. Nokia Siemens has the right to match higher bids at the auction for Nortel's wireless assets, which is set for tomorrow.
Ericsson's bid may represent an attempt by the vendor to expand its presence in the North American market, which was the strategy behind Nokia Siemens' original offer. Last month, Ericsson and Sprint Nextel, a Nortel customer, signed a $5 billion deal for Ericsson to manage Sprint's networks.
Meanwhile, despite objections from Research In Motion over its blocked $1.1 billion bid, Nortel said the auction would proceed as planned. "Nortel, the Canadian Monitor, the U.S. Unsecured Creditors' Committee and the Ad Hoc Bondholder Group have reviewed the circumstances related to RIM and have concluded that all bidders must comply with the bidding rules in order to maintain the integrity of the court-approved process," Nortel said in a statement. "Consistent with that process, the auction will commence as planned on Friday, July 24, 2009."
According to the Globe and Mail, RIM declined to comment on its plans, but unnamed sources said the company was still mulling its options.
- see this Globe and Mail article
- see this Rueters article
- see this Bloomberg News article
- see this Reuters article
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