Ciena’s Initial Nortel Bid Likely to Prevail

It appears Ciena’s stalking-horse bid for Nortel’s Metro Ethernet Networks (MEN) business could go unchallenged.

As Andrew Willis points out in today’s online edition of the Globe and Mail, the Ciena bid doesn’t exactly represent the ideal outcome preferred by Nortel’s creditors, who have favored all-cash transactions in the auction sales of Nortel’s wireless and enterprise businesses.

Nonetheless, Ciena’s bid of $521-million of cash and shares appears good enough to satisfy Nortel’s creditors and to discourage rival bidders from crashing the party. The simple fact that Nortel’s creditors accepted a stalking-horse bid that contained shares and cash is flagged by Willis as a strong indication that the Ciena offer will prevail.

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