Nortel, Avaya, Siemens, RIM, Matlin Patterson: Things Are Heating Up

by Jeff Wiener on July 21, 2009

RIM Logo

Looks like things could get interesting in the race to acquire Nortel’s assets.

Matlin Patterson has submitted a $725 Million bid for Nortel’s CDMA assets.  Looks like this offer trumps Nokia Siemens offer by $75 Million.  It also looks like RIM is interested in acquiring some of Nortel’s assets.

RIM is of course a Canadian company and could clearly take advantage of some of the BILLIONS in R&D tax credits, BILLIONS that Nortel has on their books in tax losses, and hundreds of telecom and IT related patents.  It seems like a no-brainer ? Or you would think anyway.  BUT, it seems that RIM was told if they wanted to make an offer on the Nortel CDMA business that they could not submit offers for other Nortel assets for a year.

Whose interests does this serve?  Certainly not the bondholders, pensioners, employees, and even Canadians. Isn’t this bankruptcy process intended on maximizing the remaining value of assets to maximize pay-put to these groups ?

Is this a Nortel imposed limit, or a federal limit ? Either way, there should be an exception.

Avaya’s offer for Nortel’s assets is a first step.  It’s a $475 million offer.  We’re months, many court proceedings, and multiple offers away from any of this closing.  I suspect the $475 million offer by Avaya is a first offer that will no doubt be trumped by competing bids over the next month.  Cisco has been sitting on the side lines which I find rather surprising.  Avaya’s acquiring some of this Nortel technology will clearly put Avaya into more of Cisco’s cross hairs.

RIM’s got some big tax losses, patents, and R&D credits that they could apply.  Nokia Siemens is now at the table, Matlin Patterson is obviously watching and bidding, and I’m sure other bidders will now throw their offers in.  Looks like the capital markets are easing quite a bit, the recession is dissipating, and dollars are now getting spent.   I’m going to check my piggy bank and see if we can come up with $476 million 🙂

{ 2 trackbacks }

The Strange Dance Between Nortel and RIM
July 22, 2009 at 3:53 pm
Avaya Nortel, Nortel Avaya. Which one is it ? And what happens to your old Nortel equipment ? —
December 31, 2009 at 6:51 am

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