Ciena beats Nokia-Siemens to Nortel unit
By Tom Hals
WILMINGTON, Delaware (Reuters) - Bankruptcy courts cleared on Wednesday Ciena Corp's acquisition of a unit of bankrupt Nortel Networks Inc for $769 million after fighting off a legal challenge by Nokia Siemens Networks.
Network equipment maker Ciena said it expects the deal -- which will double its size and increase debtload -- to close in the first quarter of 2010.
Ciena trumped an offer by Nokia Siemens and its financial partner, One Equity Partners, with an auction-winning bid of $530 million in cash and $239 million in convertible securities for Nortel's optical networking and carrier ethernet business.
On Tuesday, the 50-50 joint venture of Nokia of Finland and Siemens of Germany said it was ready to raise its offer to $810 million in cash, if the auction, which ended in late November, was reopened.
That set up Wednesday's fight in court, with Nokia Siemens and some creditors arguing the auction should be reopened, in part because Ciena's convertible securities were overvalued.
After roughly seven hours of argument, testimony and cross-examination, Nortel's attorney said his team had a reached a deal in the hallway outside the court that would lead to the withdrawal of the last major objection.
Withdrawal of the objections made that a near-certainty later on Wednesday.
U.S. bankruptcy court in Delaware and a Canadian court cleared the deal after simultaneous hearings, Ciena and Nortel said in separate statements. Continued...