Is NSN’s low bid causing strain at Nortel?
The deadline to bid on Nortel’s assets is less than three weeks away, and it appears the company is starting to sweat a little.
Yesterday, Nortel held an hour-long conference that sounded suspiciously like a sales pitch for its CDMA assets. The company’s press invitation for the conference had touted the call as a discussion of the “realities of the current CDMA market” within the context of Nortel’s pending sale of its wireless assets.
But the company spent the bulk of the call pointing out just how monetizable its assets were. By the end of it, ABI Research analyst Nadine Manjaro piped up to ask if the company had dragged her there for a sales pitch.
Nortel representatives replied, in part, that the call would help build sales momentum for the company that eventually acquires it.
Manjaro has a different take: She thinks Nortel is rushing to get higher bidders in before the company goes on the auction block on July 24. “The Nortel call today was to tout Nortel's true value, which will potentially increase bidders,” she says. “All of the recent press has been more on the negative side, so it was an effort to say that even though the company is going through bankruptcy, the assets are still valuable.”
So far, the only public bid has been a paltry $650 million from Nokia Siemens Networks. Nortel creditor MatlinPatterson also has said it will bid on the company, but it has yet to submit a proposal.
Despite the conference call’s note of desperation, Nortel’s wireless marketing vice president Bruce Gustafson hinted to Wireless Week that there were more offers in the wings. “If you’re assuming there are no additional bids because there’s no public disclosure, you’d be mistaken,” he said, declining to name other bidders.
The industry may have to wait until the end of the month to see if Nortel’s last-minute sales pitch was effective. On July 21, all bids for the company have to be submitted, and the identities of the bidders will become public. Nortel will be at the auction three days later, and its new owner will emerge once approval is given by the U.S. Bankruptcy Court.