How Much Will Nortel Get for Optical Assets?

It will be interesting to see how much Nortel will get for its optical and Ethernet assets in the wake of Ciena’s $521-million “stalking horse” bid. Given what happened during the auctions for Nortel’s CDMA and enterprise assets, it’s entirely possible the optical and Ethernet assets could fetch $1-billion or more.

A key question will be how high Ciena is willing to go. With $455.7 million of cash and $607-million of short-term investments on its books, Ciena appears to have the financial flexibility to make a significantly higher bid.

The company’s ability to use stock as part of the package could also be an important consideration. In a Barron’s story, Morgan Keegan analyst Simon Leopold said Ciena shares could jump as higher as US$24.50 next year (currently trading at US$12.84) because a deal with Nortel would make Ciena the third leading player in the optical switch market, and give the business greater scale.

Source: Reuters

Comments

[User 499208:]

As usual Mark Evans' at his best, second hand news and not obvious conclusions.

It is hilarious. Next time he is going to make not obvious conclusion about upcoming winter season. Something like: It will be interesting to see when winter season is going to start. Given what happened during the last year, it’s entirely possible the winter could start before X-mass, but considering global warming we may not see snow till new Year.

Wow !?

Oct 12 09:08 PM