Bidding on Nortel Networks' wireless businesses is set to begin later this month, with Nokia Siemens leading the action via a $650 million opening bid. Under a previously announced agreement, Nokia Siemens is the "stalking horse bidder" and has the ability to set the floor price for bids and match any higher offers for Nortel's businesses.
U.S. Bankruptcy Judge Kevin Gross approved the bidding process over the objections of some of Nortels' creditors and bondholders. Gross said he changed the bidding procedures to address some of the concerns after Nokia Siemens agreed to the changes.
Nortel was essentially forced to auction off its wireless assets, including its LTE unit, a Nortel executive said. George Riedel, Nortel's chief strategy officer, said in court that the company's biggest customers, including Verizon Wireless, said they were wary of buying Nortel's LTE technology because of the company's financial instability.
Wireless carriers told Nortel "we love your technology, but we are concerned about your balance sheet," Riedel said in court Monday. "Unfortunately for us, we will win the technology prize, but not the commercial business."
If Nokia Siemens secures Nortel's wireless units, it could significantly boost its presence in North America; the company has said it is confident it could win deals from companies like Verizon.
Bids are due July 21 and the auction date is set for July 24 in New York City.
For more:
- see this Bloomberg News article
- see this Reuters article
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