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Mike Z. Ready to Go Shopping
By Mark Evans | September 6, 2006
Flushing with cash (editor’s note: tongue firmly in cheek) after selling its UMTS radio access business to Alcatel last week for $320-million, Nortel is apparently ready to make some acquisitions. Let’s hope history doesn’t repeat itself given the last time Nortel went on an acquisition binge, it paid billions of dollars for companies that disappeared or were sold for pennies on the dollars. Then again, Nortel was using sky-high stock so no harm, no foul, right? - unless you were a shareholder who was massively diluted. Anyway, CEO Mike Zafirovski told Reuters yesterday that Nortel will look at takeover opportunities to increase “the scale of its operations” but Nortel would not overpay and would make sure it is prepared to integrate the new purchase. I guess that’s reassuring for anyone who thought Nortel was going to do something rash. You wonder how big of a shopping trip Nortel is prepared to make. Would it be prepared to buy Redback Networks for $1.16-billion? Or is Mike Z. talking low-cost strategic acqusititions such as the $99-million purchase of Tasman Networks last year? Given Nortel needs to be careful with its cash reserves, a betting man would wager on the latter rather than the former.
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Topics: M&A |
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