TORONTO - Nortel Networks Corp. received approval Thursday for a US$521-million bid by Ciena Corp. for its Optical Networking business as part of an auction for some of the company's most prized assets.
Bankruptcy court judges in both Delaware and Ontario gave the "stalking horse" bid a greenlight after the process hit a snag.
Both judges were unhappy with some of the specifics of the bid, including the amount Ciena would be paid if its bid was unsuccessful, and initially rejected the plan.
However, Nortel and Ciena reworked the auction plan and received approval after they presented it to the court a second time.
"We understand that there were changes to the bidding procedures and a change to the termination provisions of the stalking horse agreement," Nortel spokesman Bo Gowan wrote in an email.
"We do not have specific details on those changes at this time; however any modifications will be reflected in the court orders which will be publicly available."
Ciena spokeswoman Nicole Anderson confirmed the court approval, but also did not provide any details.
The Optical Networking business includes some of Nortel's most sought-after businesses units, intellectual properties and employees.
The judges also approved Nov. 9 as the deadline for bids and scheduled the auction for Nov. 13.
Nortel has been selling off its global operations piece by piece after seeking court protection from creditors in January.
Ciena's cash-and-stock bid covers substantially all of the fallen Canadian technology giant's Optical Networking and Carrier Ethernet businesses, including the rights to technology that enhances the speed and capacity of current fibre optic networks by as much as 10 times.
The optical and carrier ethernet business units are part of Nortel's Metro Ethernet Networks. Not included in the sale is a third unit, the Multi Service Switch business, which provides non-optical equipment and employs about 300 people.
Ciena has agreed to offer jobs to at least 2,000 employees -- which would nearly double the size of the Maryland-based company's global workforce.
The company, which had been one of Nortel's smaller rivals in an important market niche, currently employs about 2,100 workers across facilities in Ottawa, Georgia, Maryland, California, Washington State and India.
