Does Nortel have another stalking horse in Nokia Siemens?

by Guest on November 5, 2009

stalking horseRumors are rampant about Nokia Siemens, a joint venture between Nokia Corp and Siemens AG, making a competing stalking horse bid on Nortel’s Metro Ethernet Networks (MEN).

The bid will need to beat out the existing bid by Ciena, which is $390 million in cash and 10 million shares.  Additionally Ciena intends to hire up to 2000 Nortel employees, pending a successful deal.

Ciena was chosen out of a blind pool of bidders to make the first move in the auction game – strategically creating an offer that maximizes their chances of outbidding the competition.  If Nokia Siemens does bid, it will need to beat the offer from Ciena.  The stalking horse concept is commonly used in bankruptcy or liquidation situations to maximize the value of the asset.

This seems a bit ill-timed for Nokia Siemens, as they are currently looking at ways to cut costs – an announcement on Tuesday shared that they will be laying off 5,700 employees, and downsizing from five business units down to three.

Is Nokia Siemens qualified to take over what remains of the Nortel dynasty?

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