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Bidding war could deliver more cash for Nortel, assets

The bidding for the corpse and pieces of Nortel has gotten more interesting.  The Ottawa Citizen reports “vulture fund” MatlinPatterson Global Advisors is making a play for Nortel.  It couldn’t convince a U.S. bankruptcy court for an extension to the bidding process of Nortel wireless assets to Nokia Siemens Networks (NSN), however.

MatlinPatterson wanted a 15 day extension to formalize a bid. Instead, the company must put together something by July 21 for an auction being held on July 24 with NSN currently the only bidder.  NSN and Nortel were hoping to close a sale on July 29.

With about $400 million – about 10 percent of Nortel debt – in Nortel bonds, Matlin feels that Nortel is worth more than the quick bidders believe, with cash reserves of $2.7 billion (U.S.), and notes the company has made $220 million since filing Chapter 11 in January.

However, NSN won’t get a free ride. The bankruptcy court ruled that NSN has to top competing bids to win the wireless assets and has made changes to the bidding process to allow options such as the reorganization of Nortel and the sale of all assets.

Be interesting to see if NSN holds course and what kind of cards Matlin might put on the table by July 21.

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