Nokia (NYSE: NOK) Siemens Networks' proposed purchase of Nortel Networks (NYSE: NT)' CDMA and LTE assets has run into an unexpected hurdle in the form of a group of its creditors and suppliers objecting to the deal.
Meanwhile in a Delaware courtroom Monday, Nortel chief strategy officer George Riedel sought to convince a judge to approve the proposed sale for $650 million. Arguing that Nortel's technology is superior, but its financial problems drove the company into bankruptcy, Riedel said, "Unfortunately for us, we will win the technology prize, but not the commercial business."
According to media reports, Riedel said representatives from companies including Verizon (NYSE: VZ) Communications said they "love" the technology, but are concerned about Nortel's balance sheet. A pickup of Nortel's CDMA and LTE assets for $650 million would be regarded as a virtual steal, depending on the actual assets to be included in the sale.
In an analysis of the proposed deal, Light Reading said that Nortel appears to be holding on to some important LTE-related patents including some for orthogonal frequency-division multiple access and multiple input, multiple output.
"Nortel has always thought of its OFDMA/MIMO IPR as among its crown jewels," said Heavy Reading senior analyst Patrick Donegan. "As I understand it, it isn't included in the current terms of the proposed sale to (Nokia Siemens Networks.) I can only assume that Nortel still owns it."
Creditors opposing the proposed sale to Nortel Siemens include Nortel bondholder MatlinPatterson and supplier Flextronics.
The business coveted by Nokia Siemens Networks is regarded as Nortel's crown jewel, but Nortel hasn't publically revealed the full details of exactly what it would include in the proposed sale to Nokia Siemens Networks.
The acquisition is scheduled to be consummated later this summer.
Source: http://www.informationweek.com
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