MatlinPatterson Bids $750 Million for Nortel Assets

TORONTO (Reuters) – MatlinPatterson, a U.S. private equity firm that’s a creditor of Nortel Networks (NRTLQ.PK), said on Tuesday it submitted a $725 million bid for the bankrupt Canadian company’s wireless technology assets.

Last month, Nokia Siemens Networks — a joint venture of Nokia (NOK1V.HE) and Siemens (SIEGn.DE) — made a $650 million “stalking horse” bid for the assets.

Nokia Siemens, as the stalking horse bidder for the CDMA and LTE wireless assets, will have an opportunity to raise its bid at an auction that is scheduled for Friday.

CDMA, or code division multiple access, is a wireless technology that lost the battle for global dominance but still has a strong position in some markets, including India and North America. LTE, or long term evolution, is a new high-speed wireless technology that is intended to replace current mobile networks.

MatlinPatterson, a major Nortel bondholder, said last month that the proposed sale of Nortel’s key wireless technology unit to Nokia Siemens [NSN.UL] failed to maximize value for Nortel stakeholders.

On Monday, BlackBerry maker Research In Motion Ltd (RIM.TO) accused Nortel of effectively blocking it from potentially bidding $1.1 billion for the wireless assets. [ID:nN20134234]

“They (MatlinPatterson) are assuming RIM is not going to get the green light and they are low-balling,” said Carmi Levy, an independent technology analyst based in London, Ontario.

“This is a sign that they are not taking RIM’s action seriously,” he said.

MatlinPatterson said it believes that its alternative proposal is better than the bid from Nokia Siemens and provides a superior outcome for Nortel and all of its stakeholders.

The private equity firm said it is confident the CDMA and LTE businesses can emerge from bankruptcy protection as a reinvigorated, independent company.

MatlinPatterson said that, as a long-term investor in Nortel, “we are unwilling to accept and will actively take steps to prevent a ‘fire sale’ of Nortel’s core assets followed by the wholesale liquidation of the remaining businesses.” (Reporting by Euan Rocha and Pav Jordan; Editing by Frank McGurty and Rob Wilson)