How Today’s Wireless Auction Works

By Mark Evans | Published: July 24, 2009

With today’s auction of Nortel’s CDMA and LTE assets underway, there’s some questions about how the process works.

LightReading’s Craig Matsumoto has all the details. In summary, the auction works like this:

1. Bids had to be filed by Tuesday so RIM isn’t participating in today’s auction because it wouldn’t comply with the bidding process.

2. After the initial bids, Nortel will reveal the highest bid. Then, everyone has a chance to make another bid but it has to be at least $5-million higher.

But – and here’s the big but – the process make not be over even though Nortel is expected to announce the winning bid today.

According to Matsumoto, the winning bid must be approved by the U.S. bankruptcy court. Nortel will submit the recommendation on July 28 for court approval.

But – another this is another big but – Nortel’s creditors and stakeholders can object to the process.

Bottom Line: Stay tuned because it’s not over ’til it’s over.

Update: Reuters has a story on RIM’s Jim Balsillie, and his aggressive moves on Nortel and the National Hockey League.


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  • NortelTragedy

    So it was Ericsson?

  • futuregrowth

    Check this out ladies and gentlemen:
    http://www.ericsson.com/ericsson/press/releases…

    From /// .com home page…

  • futuregrowth
  • forgive

    Your 80000 share will be worth $15,000 to $20,000 in 3 weeks.

    I put $20,000 on the table today for this pink stock >>>> $60,000

    Nortel is under-valued, period.

  • nortelgut

    for anyone interested, here is a presentation about Erickson in Canada back in 2002. gives you a idea about their presence here:
    http://www.csm.ornl.gov/oscar/meetings/2002/jul…

  • NortelTragedy

    So Ericsson has agreed to take the 2,500 people? They're already absorbing Sprint heads for the Mgd Services outsourcing deal. On top of this, they're trying to cut costs:

    http://www.nytimes.com/2009/07/25/technology/co…
    http://online.wsj.com/article/BT-CO-20090724-70…

  • forgive

    Perfect, my investment on NRTLQ.PK will be tripled next week

  • NortelTragedy

    What's next? GSM, CVAS, MEN? Will Ericsson be interested in these assets / footprints as well?

  • forgive

    Com'on, guys.

    Compared with folks in other NT business units, you (Wireless) guys are lucky enough no matter who won the bid. Your personal future cash flow from new company is still way better than the remaining folks. Even ERIC lays you off in 1 year, you are still entitled to get a fat package added with Nortel working years. cheer up

  • Theleftbehind

    CVAS

  • Theleftbehind

    Hey Sue S? you didn't see this one coming, did you? hahah

  • Theleftbehind

    What is unbelievable is that Richard Lowe will continue…. what a clown.

  • Lost_NT_stock

    New ZMail: Today, we confirmed that Ericsson is the auction winner based on a purchase price of US$1.13 billion.

  • Theleftbehind

    Mike Z and the rest of the Sr. Exec team are counting the blood money of their bonuses

  • NortelTragedy

    I'm questioning Ericsson's commitments. Will they kill the business, since they are already strong leaders in LTE? Looks like they're committing to the 2,500 people, although I'm not clear of the business rationale.

  • ntpurgatory

    New Zmail states “While the deal is expected to bring opportunity to a minimum of 2,500 employees, not everyone will be offered a role at Ericsson” – IMHO that means that E/// can look at 2,500 employees and give job offers to like 1,300 and have played by the rules. Agree?

  • NortelTragedy

    If Mike Zudas says it, it must be true. Ha. Ha. He has no clue and is irrelevant.

  • NortelTragedy

    Will Richard Lowe, Bruce and the other “Who's Who” list of political operators be going over to Ericsson?

  • razzy1

    From the Ericsson PR:

    “Richard Lowe, Nortel, is appointed Chief Operating Officer.”

  • Theleftbehind

    … Magnus Mandersson, presently head of Ericsson Northern Europe, is appointed President of Ericsson CDMA operations, and Richard Lowe, Nortel, is appointed Chief Operating Officer….”

  • razzy1

    Disagree. They take 2500 according to the Ericsson PR.

    MZ is just saying there will be some others beyond the 2500 who won't be going.

  • Theleftbehind

    of course… they wont take so many employees. they will milk CDMA and use it in exchange for LTE purchases.

  • razzy1

    Perhaps Ericsson would like a wireline footprint in NA as well.

  • ntpurgatory

    E///'s web site statement says “…by adding some 2,500 highly skilled employees, of which about 400 are focused on LTE research and development…” and “Going forward, research and development costs are expected to be relatively low in CDMA compared with other technologies.” – that to me is management speak for less means more. Good if you are working on LTE access at Nortel and maybe not as good if you are working on CDMA.

  • dontknow_dontcare

    And you know this how? When is it going to announced? Who's the stalking horse bidder?

  • farscape

    From E/// PR:

    “Many employees will also have the opportunity to continue their work with Ericsson, bringing their innovation power and creativity to the wireless industry for years to come,” said Richard Lowe, President of Carrier Networks at Nortel.”"

    I don't think all of the 2500 will be given offers…

  • Theleftbehind

    the only way to make the business case work for this purchase is to take cost out and freeze all CDMA releases. They will reduce the price of CDMA to support LTE deployment. CDMA will be there for 5 years but with minimum development.
    Ericsson just also blocked NSN to get into Verizon.
    R&D CDMA employees are useless for them now.

  • Theleftbehind

    what do you say now MORON!?

  • Theleftbehind

    $975

  • nortel80

    Bye bye Nortel ya gave me a good 20 years and 10 of confusion, still a very sad day

  • slumdog

    Latest Zmail is out….

    Team Nortel:

    This has been an eventful week for our company. The interest we have seen in our CDMA and LTE Access assets is further proof of what we have always known: Nortel’s people, businesses, its innovations and customer base have considerable value in the eyes of industry players.

    Today, we confirmed that Ericsson is the auction winner based on a purchase price of US$1.13 billion. While the auction and announcement of the winning bidder have generated a great deal of interest, I know these events have also caused uncertainty for some of you. That is understandable. We do not have all the answers yet, but there will be GIS’s, documents and websites opening in the coming days which will address many of your questions.

    I want you to be assured that we will move rapidly to complete the deal and implement our transition plans. While the deal is expected to bring opportunity to a minimum of 2,500 employees, not everyone will be offered a role at Ericsson. Offers may begin going out as soon as the next few weeks, but it may also take a month or more until opportunities have been closed and selected employees have his or her future role defined.

    The final purchase price of US$1.13 billion is clear proof that a tough market has not diminished the value you have all created. Further, it's important to note that this sale price does not include cash and most receivables and payables, which stay with Nortel.

    While today’s auction was a significant step in the overall sale process, work remains to complete the sale. U.S. and Canadian court approvals will be sought at a joint hearing on July 28. There are also regulatory approvals and other common closing conditions that must still be addressed. If everything proceeds as planned, we expect to close the sale later this year. Meanwhile, we remain focused on finding the right buyers for our other businesses, including the conclusion of the recently announced Enterprise stalking horse asset and share sale agreements.

    Most importantly, a smooth integration will be key to Ericsson realizing the full value of their acquisition, and therefore the best outlook for those who will move into Ericsson. It’s critical that we continue to service customers and drive our deliverables – our plan assumes that nothing changes in the work you do every day, unless your manager comes to you specifically with a new assignment.

    I want to thank you again for helping us move through the sale of our businesses in an orderly and professional manner. I continue to be deeply impressed and respectful of all your many contributions.

    Thank you for all you are doing for Nortel.

    Mike

  • Theleftbehind

    i have been right on all the postings lately… just check.

  • Theleftbehind

    CDMA solution uses some CVAS products that cant be replaced

  • razzy1

    Regardless of what happens down the road, the Ericsson PR indicates 2500 will be joining them.

    That's certainly good news for the near-mid term for these employees.

  • Soon2BExNortel

    I'm not at all confident that they'll actually take anywhere close to 2,500 employees. They may be saying 2,500 so that everyone doesn't jump ship while they still need us.

  • Theleftbehind

    Richard Lowe got the first job offer…

  • dontknow_dontcare

    Yes, I noted that. You seem to have the inside scoop and that's why I am asking about CVAS.

  • Lost_NT_stock

    True, LTE access is more secure.

    But the total CDMA + LTE are around 3100 – 3200. So 600 – 700 people will be dumped to the street.

  • Theleftbehind

    ok… you believe the PR… get your peace of mind…
    im telling you, it wont happen.

  • Soon2BExNortel

    Thanks! :-) I could ask you questions all night, LOL. Did Nortel anticipate this outcome at all? Everyone I talked to thought NSN was almost a sure thing.

  • Theleftbehind

    they will have to bid for CVAS, they can leverage the CDMA purchase now.

    MEN is still undecided between Ciena and OneEquity. LIkely Ciena to be the Stalking horse to be announced within 10 days.

    Enterprise sale wont drive as much interest as CDMA did…

  • Theleftbehind

    CVAS was the black sheep… nobody wanted it…

  • Theleftbehind

    mainly in Canada

  • Theleftbehind

    mainly in CANADA

  • dontknow_dontcare

    So it's possible CVAS will end up with Ericsson too. What about the Sonus, Genband etc., rumors?

  • Soon2BExNortel

    It really is. So many good people in this company. :-(

  • Theleftbehind

    Mike: We presented you a viable plan for Nortel in 2006 and you just ignored it following the advice of the useless George Riedel….You screwed the acquisition of Avaya for 50 cents a share. Then you got really upset with Avaya's CEO as you felt he stabbed in your back….
    the Huawei-3COM purchase…another screw up… you are really coward and afraid of making decisions, plus a very bad judge of character…

    You should be really ashamed of you and all for all the useless and imbeciles you brought on board….

    “We will recreate what once was a great company…”… today…a 115 yeard old company destroyed, employees fired w/o severances, sr exec with bonues and some fired employees committing suicide…
    THAT IS YOUR LEGACY MIKEZ….

    But what you care? if you don't care about your kids, don't care that your wife hates you for not being there. It was all about your EGO and never about Nortel.

  • Theleftbehind

    all dancing… dont have the deep pockets.

  • farscape

    What happened to the NSN bid? They invested quite a bit in this, and not only them…

  • Theleftbehind

    Didn't see it coming. E// became a real possibility on Friday last week. NSN panicked as they only had an additional $ 300M from EDC to add to their stalking horse offer.

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