Nortel to sell optical unit at Nov. 20 auction; Nokia Siemens plans to bid

There is “at least one additional qualified bidder” besides Ciena Corp., Nortel spokesman Bo Gowan said Wednesday in a telephone interview. He declined to name the second bidder or say how much it's offering. Toronto-based Nortel will hold the auction on Nov. 20 in New York, he said.

Nokia Siemens submitted its bid with One Equity Partners LLC, according to the person, who declined to be identified because the offer isn't yet public. Reuters, citing a person familiar with the bid, reported earlier Wednesday that Espoo, Finland-based Nokia Siemens would make an offer for the optical unit.

Ciena, the only bidder identified by Nortel so far, is seeking the business to help it bolster video transmission and other Internet traffic in cities. The auction winner may gain Nortel customers in Asia and Europe, including Spain's Telefonica SA. Sales at the unit, called Metro Ethernet Networks, fell 26 percent to US$295 million in the third quarter from a year earlier, Nortel reported on Nov. 16.

Ciena, which makes fiber-optic gear for the biggest U.S. phone companies, offered US$390 million in cash and 10 million shares of common stock for the unit on Oct. 7. The so-called stalking-horse bid approved for the auction lets one party make a lead offer and allows others to top it.

On Nov. 13, Nortel extended the deadline for bidding until Nov. 17 after saying it held talks with interested parties. Earlier, on Nov. 3, two people familiar with the process said Nokia Siemens Networks was considering a bid.

One Equity Partners, which manages US$8 billion in investments for JPMorgan Chase & Co., referred questions to JPMorgan. Mary Sedarat, a spokeswoman for JPMorgan, didn't immediately return a call Wednesday seeking comment. Nokia Siemens spokeswoman Susan Schramm declined to comment.

Nortel has sold off business units piecemeal since entering bankruptcy protection in January, helping the telecommunications-equipment maker raise more than US$2 billion.

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