The United States and Canadian courts have approved the $521 million “stalking horse” bid by Ciena Corp. for Nortel’s (News - Alert) optical networking and Ethernet assets.
The approval reportedly came last Thursday, when the courts set a bid deadline of Nov. 9 and an auction date of Nov. 13.
All matters during last week’s hearing were quickly resolved and any modifications to the agreement and bidding procedures were agreed to by all parties, a Ciena spokeswoman told TMCnet.
However, judges did make a few changes to the bidding procedures and a change to the termination provisions of the stalking horse agreement and EMEA agreement, in section 5(e) of the 21-page court document, dated Oct. 15, 2009. As stated in that section: “the Stalking Horse Agreement will be modified to provide that … in the event that the Stalking Horse Agreement is terminated … the Break-Up Fee shall only be payable upon the closing of an Alternative Transaction within 12 months after terminations.”
Although Ciena still faces additional regulatory proceedings should it win, the company already has a plan in place for what it will do next.
Tom Mock, Ciena’s senior vice president of strategic planning, told TMCnet that with optical networking technology like Nortel’s, operators can provide advanced video, voice and advanced services to end users. This would boost Ciena’s presence in the marketplace among its target market, which includes large enterprises with their own private voice and data networks, as well as large operators.
“It’s basically the technology that allows existing telecoms to evolve networks to handle increased capacity,” Mock told TMCnet.
A bigger presence isn’t the only thing Ciena would gain should the bid go through; at least 2,000 Nortel employees would get offers to join Ciena’s global team of network specialists. The proposed acquisition would significantly enhance Ciena’s existing Canadian-based development resources, too, according to the company.
Mock told TMCnet the next step after the ‘stalking horse’ bid is posted is a hearing by the U.S. Bankruptcy Court for the District of Delaware. The court reportedly decides when the qualified bid period opens and how long it lasts. Should Ciena come out the winner, it will still face regulatory proceedings.
Marisa Torrieri is a TMCnet Editor. To read more of her articles, please visit her columnist page.
Edited by Marisa Torrieri