Nokia Siemens Networks and private equity firm One Equity Partners have jointly bid for Nortel Networks’ (OTCBB:NRTLQ) Metro Ethernet business, challenging Ciena’s (NASDAQ:CIEN) bid for those assets in advance of an auction to be held on Friday, Reuters is reporting.
NSN was expected to bid on the assets, which include Nortel’s optical gear, but NSN’s own current reorganization efforts complicated the picture. A joint bid with a partner could give it enough financial backing to overcome that complication, however.
Analysts have predicted that NSN would be able to beat much-smaller Ciena in a bidding war, not just because of its greater capitalization but because it would exact more synergies from such a deal that Ciena would, allowing it to pay a higher price. Ciena offered $521 million in cash and stock, which was originally estimated as slightly less than half of the 2009 revenue from Nortel’s Metro Ethernet unit. But its revenues dropped about 26% from a year earlier in the third quarter.
NSN was outbid for Nortel’s wireless assets this year by rival Ericsson.