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Nortel: We’re Acquisition-Friendly
By Mark Evans | October 13, 2006
Hmm, I wonder what this means:
“If there’s a good opportunity that makes strategic and economic sense for us … we don’t feel constrained to act on it,” - Nortel chief strategy officer George Riedel, who told Reuters that the company does not feel constrained in its ability to make acquisitions. While Nortel be may be open to the idea of acquisitions, the reality is its appetite can’t be too big because the company doesn’t have a strong enough balance sheet. Its cash position is shrinking, no one is going to accept Nortel stock as a part of a deal, and the company has so many shares outstanding, it can’t even think about doing an offering that would dilute its existing shareholders even more. Therefore, the reality is Nortel will likely pursue tiny deals (less than $100-million) and partnerships long before it ever can think about doing something more significant.
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Topics: M&A |
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