FTC Approves NSN's Nortel Acquistion While a Vulture Circles ...
>> US Antitrust Regulators Approve Nokia/Nortel Deal
Diane Bartz
Reuters (Washington)
July 7, 2009
reuters.com
U.S. antitrust regulators have approved a Nokia Siemens bid for a portion of Canada's bankrupt Nortel Networks Inc (NTL_pf.TO), the Federal Trade Commission said on Tuesday.
Nortel had said Nokia Siemens Networks [NOKI.UL] -- a joint venture of Nokia (NOK1V.HE) and Siemens (SIEGn.DE) -- would offer $650 million for Nortel's CDMA and LTE wireless technology businesses and act as the "stalking horse bidder."
In a bankruptcy auction a "stalking horse" typically sets the floor for bidding, and makes the lead bid at the bankruptcy auction. Nokia Siemens will have the right to match any higher offers.
The FTC, one of two agencies that assesses mergers for potential violations of antitrust law, put the approved deal on a list of OKed mergers that it issued on Tuesday.
The auction for Nortel is set for July 24 in New York and the deadline to submit bids is July 21. The deal is subject to bankruptcy court approval and a court hearing is set for July 28, according to court documents. ###
>> 'Vulture' Investor Raises Rhetoric on Nortel
Bert Hill
The Ottawa Citizen
July 7, 2009
The New York City "vulture fund" trying to buy Nortel Networks ramped up a media offensive yesterday.
MatlinPatterson said its object "is to present an alternative that not only exceeds the current bid (from Nokia Siemens Networks of $650 million for Nortel wireless assets) but provides ... a superior outcome for the company and all of its constituencies."
The $9-billion fund, which specializes in "distressed assets," disclosed last week that it is trying to put together a bid by the July 24 deadline set by a U.S. bankruptcy court for alternatives to the NSN deal.
MP, which owns $400 million, or about 10 per cent, of Nortel's bonds, is believed to be working with other debtholders on a plan to swap debt for a stake in a reorganized Nortel.
Another potential approach could be to coax other Nortel creditors to reject the NSN sale.
The Nortel board and management now have the exclusive right to make proposals for the future, but that right runs out this fall. Other creditors could then put together alternative plans.
When Nortel announced the sale of the wireless assets June 19, it said it planned to sell off remaining product lines as well. It had previously said that it planned to reorganize the company with the goal of emerging from bankruptcy protection.
MatlinPatterson said it wants to retain the value of the company "rather than merely accepting a fire sale of the core asset followed by the wholesale liquidation of the remaining businesses."
The tentative deal with NSN is for most of Nortel wireless equipment assets representing 25 per cent of company sales.
Other major product lines include enterprise phone and networking gear sold to corporate and government clients, optical products, wireline equipment sold to phone companies and a stake in LG Nortel. Nortel has other joint ventures in China and Turkey that might also be sold.
Paul Dewar, the NDP MP for Ottawa Centre, criticized the federal government for supporting the tentative Nokia Siemens deal with a $300-million loan from Export Development Canada.
"We need a Canadian solution for Nortel to protect jobs and pensions, and protect Canadian know-how."
Meanwhile, employees at a Nortel product development operation west of Paris said they plan to strike.
They told Bloomberg News that Nortel cut off $300 million in funding and laid off as many as 500 employees. The French research operations were recently put into liquidation but the company continues to support sales operations. ###
>> For Nortel, it's MatlinPatterson vs. Nokia Siemens
Mike Dano
Fierce Wireless
July 7, 2009
tinyurl.com
A battle worth billions of dollars appears to be brewing over the fate of telecom equipment maker Nortel Networks, a conflict that currently pits private equity firm MatlinPatterson Global Advisors against Nortel rival Nokia Siemens Networks.
MatlinPatterson, which specializes in distressed investments and is a major bondholder and Nortel creditor, yesterday announced its intentions to submit a bid for Nortel that would keep the Canadian firm intact. The action puts MatlinPatterson in direct competition with Nokia Siemens, which last month announced a $650 million play for Nortel's wireless businesses--including CDMA and LTE technologies--as part of a bankruptcy auction of the company's assets. Analysts quoted by Reuters speculated Nortel's value at $3 billion if sold in one piece.
"MatlinPatterson believes Nortel is a solid company with a valuable brand, talented employees and innovative technologies," the firm said in a statement. "It is interested in retaining, for current investors, the inherent value of the company rather than merely accepting a 'fire sale' of its core asset followed by the wholesale liquidation of the remaining businesses."
"The firm has a proven track-record of leading successful reorganizations and is currently conducting due diligence and meeting with other potentially interested parties as part of our effort to prepare an alternative proposal," MatlinPatterson said.
The firm, which owns $400 million--about 10 percent--of Nortel's bonds, is believed to be working with other debtholders on a plan to swap debt for a stake in a reorganized Nortel, according to The Ottawa Citizen.
Analysts quoted by Reuters said MatlinPatterson's endeavor may well pay off--and likely would please Canadian interests--but pointed to the massive difficulties Nortel has faced so far in its attempts to remain unbroken.
Bids for Nortel are due July 21 and the bankruptcy auction date is set for July 24 in New York City. As the "stalking horse bidder," Nokia Siemens has the ability to set the floor price for bids and match any higher offers for Nortel's businesses. ###
- Eric - |
