MPAM Wireless, an affiliate of Nortel creditor MatlinPatterson, has submitted a $725 million bid for Nortel’s wireless assets, surpassing Nokia Siemens Networks’ stalking horse offer of $650 million.
Yesterday was the deadline for submitting bids for Nortel’s assets; a private auction will be conducted Friday.
MatlinPatterson wants to make Nortel’s CDMA and LTE assets the keystone of an independently-owned company, and plans to acquire additional Nortel assets in the future.
In a statement, the company said that its bid allowed “current Nortel employees to continue working for a strong, independent Nortel, rather than working for a relatively small subsidiary of a corporate conglomerate.”
Because of the court-approved bidding process put into place by Nortel, MatlinPatterson must acquire the company piece by piece over the next year instead of purchasing the company whole.
Nortel’s bidding process was thrown into the spotlight yesterday when Research in Motion (RIM) claimed that it had been blocked from submitting a $1.1 billion offer for Nortel’s wireless business because it also wanted to buy other assets. RIM claimed it was told that it could only qualify if it did not submit offers for other Nortel assets for one year.
The court-approved bidding process contains a standstill provision that precludes companies that have already submitted a bid for assets from acquiring additional assets without Nortel’s consent.
“In seeking to impose this condition, Nortel and its advisors were fully aware of RIM's desire to purchase other Nortel assets as part of a solution to retain key portions of Nortel's business under Canadian ownership,” RIM said in a statement.
Nortel maintains that it is open to working with RIM under court-approved guidelines. “Such a standstill provision does not preclude future offers by RIM to acquire assets, it simply requires Nortel's consent and therefore allows Nortel to ensure that Nortel is directly involved in any future negotiations involving the sale of Nortel's valuable assets and that the pursuit of any asset purchase is consistent with any processes established by Nortel or the courts,” the company said in a statement.