By Roger Cheng
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)
Nokia Siemens, however, is just one of several companies eyeing the business, according to the source. Last month, Ciena Corp. (CIEN) planted its flag with a $510 million "stalking horse bid" for the assets, which put another one of bankrupt Nortel's businesses in play.
Under the stalking horse deal--common with companies under bankruptcy protection--Ciena was choisen out of a blind pool of bidders to set a benchmark offer for the business. Nortel's Metro Ethernet Networks unit specializes in equipment to long-distance networks.
It's still unclear whether Nokia Siemens, which is a joint venture between Nokia Corp. (NOK) and Siemens AG (SI), actually will make a bid, the source said. There have been a number of companies looking at the business, but their intent is still unknown.
If they do, they'll have to exceed Ciena's offer, which calls for $390 million in cash and 10 million shares. Ciena also intends to hire up to 2,000 Nortel workers if the deal goes through.
The deadline for the bids is Monday, and the auction will take place the following Friday.
Nokia Siemens has struggled in the telecom equipment business, recently weighing on its parents' financial results. Picking up Nortel's business would expand its presence in the U.S., where it lags behind rivals such as market leader L.M. Ericsson Telephone Co. (ERIC) and Alcatel-Lucent (ALU).
Spokesmen for Nokia Siemens and Nortel weren't immediately available for comment.
Nortel is still undergoing the process of selling itself off. Earlier this year, Avaya Inc. (AV) agreed to pay $915 million for the part of Nortel that sells communications gear to corporations, while Ericsson bought Nortel's wireless networks business for $1.13 billion.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com