NEW YORK, Nov 22 (Reuters) - Ciena Corp has raised its offer for Nortel Networks Corp's optical networking and carrier ethernet business to $714 million, sources familiar with the matter said on Sunday, as the auction for these assets entered its third day.
Ciena's new bid now consists of $500 million in cash and $214 million in convertible notes, the sources said, speaking on condition of anonymity since details of the auction have not been made public.
Ciena's initial bid for these assets of the bankrupt Canadian telecommunications gear maker consisted of $390 million in cash and 10 million in shares of Ciena's stock. Based on the Friday closing price of Ciena's stock, that offer was valued at $522 million.
That bid, announced last month, was in the form of a stalking-horse offer, which set a floor price for these assets that make up most of Nortel's metro ethernet business.
The stalking-horse bid allowed Nortel to seek higher offers.
On Nov. 18, another source familiar with the sale told Reuters that Nokia Siemens Networks and private equity firm One Equity Partners had also jointly bid for the assets.
Ciena, which also makes network equipment, hopes to increase sales with the acquisition.
But analysts and investors have been concerned that the deal will weigh down Ciena's operations, which has hurt the U.S. company's shares in recent weeks.
Ciena's market value is $1.2 billion. It had just over $1 billion in cash and securities, including $456 million in cash, as of July 31.
Nortel tried to sell the metro ethernet unit, seen by some analysts as its crown jewel, late last year, but suspended the plan after it filed for bankruptcy in January 2009.
Since its bankruptcy filing, Nortel -- once North America's largest telecoms equipment company -- has been auctioning off assets rather than restructuring.
Representatives for Ciena and Nortel did not immediately return calls seeking a comment. Nokia Siemens declined to comment.
(Reporting by Anupreeta Das, editing by Maureen Bavdek) Keywords: CIENA/ . Keywords: CIENA/ (anupreeta.das@thomsonreuters.com; +1-646-223-6224) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Ciena's new bid now consists of $500 million in cash and $214 million in convertible notes, the sources said, speaking on condition of anonymity since details of the auction have not been made public.
Ciena's initial bid for these assets of the bankrupt Canadian telecommunications gear maker consisted of $390 million in cash and 10 million in shares of Ciena's stock. Based on the Friday closing price of Ciena's stock, that offer was valued at $522 million.
That bid, announced last month, was in the form of a stalking-horse offer, which set a floor price for these assets that make up most of Nortel's metro ethernet business.
The stalking-horse bid allowed Nortel to seek higher offers.
On Nov. 18, another source familiar with the sale told Reuters that Nokia Siemens Networks and private equity firm One Equity Partners had also jointly bid for the assets.
Ciena, which also makes network equipment, hopes to increase sales with the acquisition.
But analysts and investors have been concerned that the deal will weigh down Ciena's operations, which has hurt the U.S. company's shares in recent weeks.
Ciena's market value is $1.2 billion. It had just over $1 billion in cash and securities, including $456 million in cash, as of July 31.
Nortel tried to sell the metro ethernet unit, seen by some analysts as its crown jewel, late last year, but suspended the plan after it filed for bankruptcy in January 2009.
Since its bankruptcy filing, Nortel -- once North America's largest telecoms equipment company -- has been auctioning off assets rather than restructuring.
Representatives for Ciena and Nortel did not immediately return calls seeking a comment. Nokia Siemens declined to comment.
(Reporting by Anupreeta Das, editing by Maureen Bavdek) Keywords: CIENA/ . Keywords: CIENA/ (anupreeta.das@thomsonreuters.com; +1-646-223-6224) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.