$521M - Ciena's Bid for Nortel Unit

Valued at $521 million is what the total bid on the closing price of Ciena's shares.

The two firms have already an agreement, this was the rumor but the two firms confirmed that they have discussing things earlier this week. Nortel stated in a release that they are discussing things such as intellectual properties of the unit and the patents as well.

Horse bid means the financially distressed company would pick a buyer for their assets and acquire them to present a bid.

Within the horse bid, the deal is that Ciena would be required to provide employment to at least 2000 of Nortel’s current employees or about 85% of Nortel’s current workers. The purpose of this horse bid is to situate a standard price and put off lowball offers.

In July, a stalking horse bid was submitted by Avaya Inc. and it is about $475 million US for Nortel's enterprise business. For about $900 million was the amount the unit was purchased.

In reselling the Ciena shares, there would be certain restrictions which are subjected to Nortel. Courts in Canada and the U.S. would need to provide there approval first.

Ottawa stated that in some vital market, Ciena is one of Nortel's smaller contenders but as soon as it will be purchased completely, it would be then the biggest home in terms of development and research of Ciena. James

Frodsham, Ciena vice-president stated that, with this, we can see the great opening of bringing together two firms that has balance set of product potentials.

In January, Nortel has been in the procedure of selling all of its assets. For $1.1 billion, Nortel sold its popular wireless assets to Sweden's Ericsson.