Monday, July 20, 2009

MatlinPatterson Bids $725 Million for Nortel's CDMA/LTE, Topping NSN

MatlinPatterson Global Opportunities Partners III, a private equity firm with $9 billion under management, announced a bid to acquire substantially all of Nortel's CDMA and LTE Access assets for US$725 million. The bid effectively tops the $650 million acquisition proposal from Nokia Siemens Networks submitted last month.

MatlinPatterson is proposing to form a "New Nortel" with long-term viability in order to maximize value for all stakeholders. This independently held business would provide a range of opportunities -- from additional bolt-on acquisitions to partnerships to reinvention and new ideas from within the technology asset base.

The company said its alternative proposal is substantially similar to the NSN proposal, but it is notably different in that it offers $75 million more than NSN's bid for the selected CDMA and LTE Access assets, it provides existing creditors with the opportunity to participate side-by-side in its investment, and it creates potentially value-enhancing alternatives for additional Nortel assets other than liquidation.

For customers and suppliers, MatlinPatterson said its proposed new company would provide a smooth transition and continuity of normal commercial relations. MatlinPatterson would be positioned to acquire additional Nortel assets to meet the global needs of the existing customer base. For employees, MatlinPatterson would aim to preserve as many, if not more, jobs as the NSN proposal with the potential to save many thousand more Nortel jobs.

MatlinPatterson has engaged a team of industry advisors led by former Nortel executives Dion Joannou, Richard Piasentin and Tony Pirih, to assist in evaluating transaction alternatives. Its team also includes former executives at AT&T, Alltel and Motorola.

  • On June 19, Nokia Siemens Networks announced its bid to acquire Nortel's key wireless assets for $650 million. The deal would bring together the assets of the two companies in the field of mobile radio access, especially in CDMA, where Nortel is a leading supplier. The acquisition of Nortel's profitable CDMA business would significantly improve Nokia Siemens Networks' presence in North America and make it a leading supplier of wireless infrastructure products in the region.