Nortel NetworksNATHAN DENETTE
On the eve of an international auction for the prized wireless assets of Nortel Networks Corp., Research In Motion Ltd. continued to promote its maverick takeover bid with plans that include a potential joint bid with a New York private equity fund.
RIM is in discussions "with a variety of parties" about its offer to acquire Nortel assets for as much as $1.1-billion (U.S.), the BlackBerry maker said in a statement Thursday night. The Waterloo, Ont.-based company has opted out of a formal court-supervised auction for the Nortel unit, which begins Friday in New York.
But sources said among the options RIM is considering is teaming up with one of the three formal bidders that have qualified to place bids.
Of the three bidders, the most likely partner for RIM is MatlinPatterson Global Advisers LLC, a private equity fund that is also a major Nortel creditor. The fund has tabled a $725-million offer for Nortel's wireless network group, a bid that places it in the middle of two other offers.
Sweden's Telefon AB LM Ericsson has submitted a $730-million takeover proposal, and a $650-million offer has been made by Nokia Siemens Networks BV, a joint venture between Finland's Nokia Corp., one of the world's largest cellphone makers, and Germany's Siemens AG.
Spokespeople for RIM and MatlinPatterson declined to comment.
The private equity fund has a history of teaming up with strategic partners in its takeovers of distressed companies.
RIM has been in discussions with Nortel, some of its creditors and federal officials for months about a possible bid for the wireless division and other unidentified assets being sold through an auction supervised by bankruptcy courts in Canada and the United States.
It abruptly pulled out of takeover discussions earlier this week after sources said Nortel declined RIM's request for confidential information about licences related to Nortel's new generation of wireless technology.
According to sources, Nortel denied the only Canadian suitor access to the data because RIM refused to sign a confidentiality agreement, a standard practice in takeover negotiations, and which the other bidders agreed to sign.
Nortel's wireless technology has sparked such a heated international takeover battle because the world's leading technology companies are in a race to deliver a new generation of wireless technology, called Long Term Evolution or LTE, that significantly enhances the speed and quality of video, gaming and other downloads on handheld devices.
RIM has upped the ante on the auction by publicly criticizing Nortel and calling on Ottawa and stakeholders to support a Canadian rescue for Nortel, once the country's most admired company. RIM's unusually aggressive attack - made in a press release Thursday night - on Nortel's "conduct in managing the bid process" has surprised and complicated efforts by Nortel's board and court-appointed monitor to sell assets in a tough economic environment.
The sale moves into the final stages Friday morning, when Nortel's U.S. law firm Cleary Gottlieb Steen & Hamilton LLP ushers teams from Nokia, Ericsson and MatlinPatterson into its U.S. offices to start the auction. According to people familiar with the plans, bidders will have until the end of the day to submit sweetened offers for the wireless assets. If the bidding is still close by Friday evening, it is possible that the auction could continue over the weekend.
Sources said RIM has two choices if it opts to join up with MatlinPatterson. The private equity fund could reveal a partnership with RIM during the auction, or it could bring the BlackBerry maker into a Nortel venture later if it wins the bidding war.
Paul Waldie