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Avaya buys Nortel 3
- Thread starter BIS
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1
- #4
mikeydidit
IS-IT--Management
A little more on this that I received this morning.
Yesterday, July 20th, 2009, Nortel issued a news release which stated in part:
Nortel Networks Corporation [OTC: NRTLQ] today announced that it, its principal operating subsidiary Nortel Networks Limited (NNL) and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited, have entered into a "stalking horse" asset and share sale agreement with Avaya Inc. (Avaya) for its North American, Caribbean and Latin America (CALA) and Asia Enterprise Solutions business; and an asset sale agreement with Avaya for the Europe, Middle East and Africa (EMEA) portion of its Enterprise Solutions business for a purchase price of US$475 million. These agreements include the planned sale of substantially all of the assets of the Enterprise Solutions business globally as well as the shares of Nortel Government Solutions Incorporated (NGS) and DiamondWare, Ltd.
Nortel will file the stalking horse asset and share sale agreement with the United States Bankruptcy Court for the District of Delaware along with a motion seeking the establishment of bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers, as required under Section 363 of the U.S. Bankruptcy Code. A similar motion for the approval of the bidding procedures will be filed with the Ontario Superior Court of Justice. Following completion of the bidding process, final approval of the U.S. and Canadian courts will be required.
For those of you wondering what a stalking horse bid is, according to Investopedia , a stalking horse bid is an initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt company chooses the stalking horse to make the first bid. This method allows the distressed company to avoid low bids on its assets. Once the stalking horse has made its bid, other potential buyers may submit competing bids for the bankrupt company's assets. In essence, the stalking horse sets the bar so that other bidders can't low-ball the purchase price.
Essentially, what this means is that while Nortel is a step closer to finding a buyer, nothing is really known for sure. If no one else steps up with a higher bid, Avaya would be the owner of Nortel (assuming the court approves). However, at this point anyone else (say perhaps, Gores Group who presently owns Siemens and Enterasys) could still prevail. According to a Nortel webinar held yesterday afternoon, the open auction process should be approved by the bankruptcy court by the first week of August. This is followed by a 45 day auction period which would end on or about the middle of September. During this time, any creditable bidder has the opportunity to offer a better bid than that on the table from Avaya. (Better is defined as higher total value and a certainty to be able to complete the process.) The bids will be evaluated by the creditor committee and presented to the court. So, for those of you waiting for something definitive from Nortel the waiting isnt over yet.
The same vexing questions as to whether the buyer wants Nortel for its technology, for its embedded base, or for both and what all this means to Nortel customers and their systems still remain unanswered.
It is also interesting to note that despite the fact that this announcement is just the beginning of the process, a number of the press releases give the impression, at first glance, that this is a done deal. Far from it.
There has also been some speculation in the industry as to whether an Avaya/Nortel combination might trigger anti-trust concerns given the size of the combined installed base and the industry dominance such a combination might have. More wait-and-see.
And finally, it appears that competitors are stepping up efforts to attract Nortel customers with limited time exceptional incentives for Nortel's North American large enterprise customers to migrate away from Nortel. Expect to see more such offers in the near future. If you are thinking about moving away from your Nortel platform, despite the economy, now might just be the time.
When is the last time you helped someone, just because you were able to?
For the best response to a question, read faq690-6594
Yesterday, July 20th, 2009, Nortel issued a news release which stated in part:
Nortel Networks Corporation [OTC: NRTLQ] today announced that it, its principal operating subsidiary Nortel Networks Limited (NNL) and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited, have entered into a "stalking horse" asset and share sale agreement with Avaya Inc. (Avaya) for its North American, Caribbean and Latin America (CALA) and Asia Enterprise Solutions business; and an asset sale agreement with Avaya for the Europe, Middle East and Africa (EMEA) portion of its Enterprise Solutions business for a purchase price of US$475 million. These agreements include the planned sale of substantially all of the assets of the Enterprise Solutions business globally as well as the shares of Nortel Government Solutions Incorporated (NGS) and DiamondWare, Ltd.
Nortel will file the stalking horse asset and share sale agreement with the United States Bankruptcy Court for the District of Delaware along with a motion seeking the establishment of bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers, as required under Section 363 of the U.S. Bankruptcy Code. A similar motion for the approval of the bidding procedures will be filed with the Ontario Superior Court of Justice. Following completion of the bidding process, final approval of the U.S. and Canadian courts will be required.
For those of you wondering what a stalking horse bid is, according to Investopedia , a stalking horse bid is an initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt company chooses the stalking horse to make the first bid. This method allows the distressed company to avoid low bids on its assets. Once the stalking horse has made its bid, other potential buyers may submit competing bids for the bankrupt company's assets. In essence, the stalking horse sets the bar so that other bidders can't low-ball the purchase price.
Essentially, what this means is that while Nortel is a step closer to finding a buyer, nothing is really known for sure. If no one else steps up with a higher bid, Avaya would be the owner of Nortel (assuming the court approves). However, at this point anyone else (say perhaps, Gores Group who presently owns Siemens and Enterasys) could still prevail. According to a Nortel webinar held yesterday afternoon, the open auction process should be approved by the bankruptcy court by the first week of August. This is followed by a 45 day auction period which would end on or about the middle of September. During this time, any creditable bidder has the opportunity to offer a better bid than that on the table from Avaya. (Better is defined as higher total value and a certainty to be able to complete the process.) The bids will be evaluated by the creditor committee and presented to the court. So, for those of you waiting for something definitive from Nortel the waiting isnt over yet.
The same vexing questions as to whether the buyer wants Nortel for its technology, for its embedded base, or for both and what all this means to Nortel customers and their systems still remain unanswered.
It is also interesting to note that despite the fact that this announcement is just the beginning of the process, a number of the press releases give the impression, at first glance, that this is a done deal. Far from it.
There has also been some speculation in the industry as to whether an Avaya/Nortel combination might trigger anti-trust concerns given the size of the combined installed base and the industry dominance such a combination might have. More wait-and-see.
And finally, it appears that competitors are stepping up efforts to attract Nortel customers with limited time exceptional incentives for Nortel's North American large enterprise customers to migrate away from Nortel. Expect to see more such offers in the near future. If you are thinking about moving away from your Nortel platform, despite the economy, now might just be the time.
When is the last time you helped someone, just because you were able to?
For the best response to a question, read faq690-6594
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- #5
DontDeleteMeAgain
Vendor
Makes sense, they knew about this since they developed Aura
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