In the hours leading up to the auction of bankrupt Nortel Networks' wireless assets, Research In Motion was still angling to get in on the bidding process. The auction began this morning in New York City, and analysts and bankruptcy experts said that RIM's attempts to submit a bid or object to the auction were likely to be a long shot.
"RIM remains seriously interested in bidding on Nortel assets and continues to engage with a variety of parties, including Nortel stakeholders, who share RIM's concerns in ensuring that RIM's generous offer be properly considered," the company said in a statement issued last night. Meanwhile, Canada's finance minister said RIM was right to ask the Canadian government to look more closely at the sale of Nortel's assets.
RIM has opted out of the formal, court-supervised auction, but according to a Business News Network report, RIM was considering joining forces with one of the three players that have submitted formal bids for Nortel's CDMA and LTE assets. The company said earlier this week that it had effectively been blocked by Nortel from submitting a $1.1 billion bid. Nortel said that RIM refused to comply with court-approved procedures.
Going into the auction, Nokia Siemens placed a $650 million bid; private equity firm MatlinPatterson placed a $725 million bid; and Ericsson had made a $730 million bid. Since Nokia Siemens is the "stalking horse" bidder, it has the right to match higher bids.
RIM might try to object to the proceedings, but the likelihood of the company prevailing was slim, experts said.
"I'm not sure that the courts will allow RIM back in. I think the probability is very low," Canaccord Adams analyst Peter Misek told Reuters. RIM can object to the auction at a hearing July 28, but may not find a sympathetic ear.
"It sounds to me like they're not really interested in bidding," David Neier, a lawyer at Winston & Strawn, told Dow Jones Newswires. "What they really should be doing is running into bankruptcy court and saying, 'Judge, we're in every respect a qualified bidder. We have cash and we're ready to rock and roll. They won't let us.'"
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