More Time on the Block for MEN

Nortel bid date for MEN pushed to Nov. 17. http://bit.ly/2Ne3L3

Nortel can't even proceed on Chapter 11 in a orderly manner. The 2 auctions are postponed again. Bravo Nortel, another one for the books, I guess.
Nortel : a tragical-comedy that never ends !

Nortel says the auction is still set for Friday, though admits that situation could change before the end of today. Ciena spokesfolk couldn't immediately be reached for comment. We're guessing they were all in a meeting poring over the auction fine print...

— Ray Le Maistre, International News Editor, Light Reading, nov 12

Yep, 'Business made complicated' till the end !

telecom will heat up with more competition. HP just acquired 3Com for 2.7B. wonder why they did not go for Nortel enterprise.

Who with sound mind would want that piece of sh@#t? From all Nortel's LOBs only UMTS had worse performance, and accumulated more losses. If it wasn’t for UMTS and MEN losses Nortel would have probably survived. Ciena will go fast down the toilet after the assimilation is completed.

probably everyone is waiting for results to decide to bid.

Wondering if the stalking horse conditions

Retain 100% of Ottawa employees
Stay at present facilities for at least 2 years
Maintain 85% of employees world wide
etc.

are limiting interest in the organization,
seems restrictive for a bidder

No. Those labs will cost millions to move and I doubt their existing customers will want them moved in case of disruption. If the bidders don't already understand those facts, they should take a pass on the bid. Location is no longer relevant in sales or design. I would think it's a good idea to retain everyone initially and then see if you can make some of them redundant once you assess the business in more detail.

The problem with bringing 100% of employee base and their years of service over to a new company, and trimming later is you have to pay severence with the carry over years of service at the other company, huge payouts and burden for new owner. I would think a smart buyer would want to buy the division, during the transition period, analysis the merger, develop a plan, decide how goes and who stays, bring over who you believe you need, and if they decide to trim later smaller burden.

Ciena stocks have dropped since the announcement to buy the MEN organization,
so the offer on the table has dropped to a low $515M, and it's the only division they
have accepted cash and stock for, all others cash only. If other bidders don't step
up to the table and increase the bid, the MEN (the crown jewel) will be the lowest selling division of the corporation, and the only one which had to be partly purchased with stocks.

This is not looking good to me. MEN has great optical technologies. It appears to me that the other companies aren't excited about optical that much. Do they think there's not much money to be made in optical?

The only great technology MEN has is 40G/100G. Is it worth 500M?

The culture in MEN is: build what ever we want to build to show how good we are. Thus MEN has some shiny stars speaking around to show how smart they are, while as those salved engineers are fooled to believe they are part of glory. But guess who will burden cutting knif?

Who ever might buy MEN, is better to let those 'slaved' engineers to chose whom of those JCI5+ guys they want to work for, and cut those un-selected. It's the only way the buyer could actually make benifit from what they bought.

My dream only ...

The reality of the business is that most customers in optical have lots and lots of legacy equipment. Yes, some move to the new stuff (40G and possibly 100G, when Nortel sells it), but those are the early adopters. The bread and butter of the optical market, not just for Nortel, but everyone, is servicing the legacy customers and encouraging them to encourage their customers to move to the new stuff. Nortel is one of the leaders in 40G sales and that's not even triple digit sales yet (according to public sales records). I believe MEN is worth at least $1 billion. I guess we'll see what the auction determines.

500M can build 100G 2 or 3 times over. Market will move towards 100G by the time they are ready to adopt higher capacity solutions.

wonder what the combined company will look at. what is Ciena culture like. will there be a big religion clash in the combined company. that will not be good as it will slow how quickly they integrate the two.

The two Garys recommendation was mainly invest in Enterprise,
keep Carrier, drop wireless (too late to market) and Optical (Market shrinking
limited feature sales and increasing competition).

Wonder would have happened if executives had listened to them.

The two Gary's were Enterprise guys and nothing more. I don't think they understood the leadership Nortel had in Carrier or Optical. And they apparently didn't understand the spectacular revenues that both were bringing in at that point.

They were one-trick ponies that had a very good view of Enterprise, but nothing else.

Nortel was right to get rid of them as there was no way in hell they could ever have gone up against Cisco in Enterprise.

Great guys in their business in the wrong company.

This is the problem with Nortel, their thinking is/was spectacular revenues are fantastic, revenues doesn't mean anything unless you're making profits from your revenues, this was their problem, slim margins on products/services, 10-15% margin typically means a break even point, products margins have to be 50% or better to be profitable.

The two Garys were tasked with analyzing the corporation and the future market, and leading it into the future market, not analyze what the corporation was doing now or in the past. Conclusion the corporation need to be focused on one or two markets, not trying to do everything
and being the best at it (look at what the car companies did, dropped divisions down to a few).

They wanted to keep Carrier and Enterprise, so they understood their leadership and SW features generate high profit margins.
They viewed optical and wireless as the market was changing - increasing competition, market share was falling, cheaper competitors out there, smaller opportunity for SW features.

We'll never know if their plan would have been successful, when Mike Z showed up he rejected their plan, he was never going to accept a plan to save the company that was develop before his time or without his input, after he was brought in to save the day and he was going do it his way, the Six Sigma way.

You are such a moron. What "spectacular revenues"? You have no clue how much money Nortel lost in that black hole called MEN.
As far as the two Gary's are concerned - at that time they were the only hope for Nortel's salvation. It sounds like you would have been the first to go if they stayed on.

chapter 11 but a year later from now.

What am I missing? They can extend the deadline for bids by only 5 days, so bidders have until the day of the auction - Friday, November 13 - to put in their bids instead of the cut off dated for bidders on Monday, November 9.

It sounds like some of the interested bidders just needed more time to sort out the paperwork.

Maybe Nortel threw in another patented elevated eargings restatement to raise the opening bids?

<<Nortel Business and Financial Restructuring>>

http://www.nortel.com/corporate/restructuring.html

...still in denial.

<<...10 million shares...>>

Any ideas on who would get those shares or would they have to be dumped and the proceeds put in the claim pot?

Why would Ciena issue shares to Nortel/E&Y as part of this deal?

Why not issue the shares to the public/institutional buyers, raise the cash that way, and then pay in cash?

I'm sure there's a good reason, I just don't see it yet :)

More time again ! Ridiculous ! More then a year is not enough to sell the crown jewels ! I guest the jewels left the crown years ago; stolen by all these fat managers that took all what they could during their reign and run away.

With all the talk about being the crown jewel, they never mentioned the
jewel was actually colour glass.

If nobody else bid, sell it to Ciena! Full stop! Stop the pain for employees and customers! It's better a bird on hand than two flying away!

Well said, and wise words. I do feel bad for all those MEN employees who have been left waiting for so long. First to be put on the selling block and one of the last to be sold. Talk about being left in limbo.

Get it sold so those engineers can concentrate on doing what they do best and stop having to worry about whether they'll see another paycheque.

No surprise in the lack of interest in the MEN organization,
as an outsider dropped into the organization and then expelled,
the first thing that hits you,

"You don't run a business like this", followed with
"High rate of Spending"
"Sponsorship deals"
"You're not profitable, margins are none existent"
"Pet projects"
"Competition is increasing, Market is shrinking"
"Won't change"
"Duplication"
etc, etc, etc, etc

Always knew MEN would be a difficult sell, and they don't like or listen to outsiders
The insiders thought highly of themselves, put themselves up high on a pedestal
and thought they made Nortel in the late 90's, and everyone else was along for the
ride, it was the outsiders that saw light.

This is very true. MEN top management are there due to their relationship with Morin. He re-cycled the same old names for years. With the exception of the R&D leader, many of Morin's direct report have nothing special to offer. Morin's leadership team is the team responsible for bad margins, building useless overlay teams, high cost and poor support for field sales teams.

"The Toronto-based company, which reported losses of almost $6 billion last year, has raised more than $2 billion so far from the asset sales."

and if they owe $28 billion, what a disaster.

...no more bonuses for cutting costs on losing revenues. bought or maintained, no more bonuses for financial innovation, no more bonuses to the death of a fly or every time the wind changes direction...

...and who will acquire the hard to find tyrants that were still there from the crime scene? Any more energy tax campaigns, this is the best time to buy, or become a Nor tell partner for 90 days with 20% discounts, etc...? The puns never cease.

Gary Daichendt must be just shaking his head as they liquidate toxic waste.

Never mind the hard to sell fire sales to suckers, when will the fraud trials commence with Manley's law firm defending Dunn as the final chapter to this soon to be unfond memory.

All this should have gone down years ago when trading at 45 cents than extending so much damage with a mega rally and ongoing false prophets.

Proto, you wrote "and if they owe $28 billion"

Isn't that just the claims against them, which is materially different to what they owe?

I'm all for the ugly truth when it comes to Nortel, but it's important that we keep the truth accurate otherwise it comes across as bashing witha grievance.

Ya --- even the E&Y report notes that many of the large claims were duplicated (triplicated) against multiple Nortel entities to cover bases - let the courts decide where it should really come from. Real claims are no where near $28B - and then discount the US govt bogus tax challenge.