RIM blocked from bidding for Nortel assets
WATERLOO, Ont. - Research In Motion Ltd. (TSX:RIM) said Monday that it has effectively been prevented from submitting an offer for the Nortel wireless business because of its desire to buy other Nortel assets as well.
"RIM sought to be qualified as a qualified bidder in Nortel's auction bidding process for the Wireless Business, but RIM was told it could be qualified only if it promised not to submit offers for other Nortel assets for a period of one year," the company said.
Based on a preliminary review, RIM said it would be prepared to pay in the range of US$1.1 billion for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets.
Nokia Siemens has made a US$650-million offer for Nortel's wireless division.
The deadline for bidding submissions for the wireless division is Tuesday at 4 p.m. ET.
"RIM is extremely disappointed that Nortel's world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada and that Canada's own Export Development Corporation is preparing to help by lending $300 million to another bidder," RIM co-chief executive Jim Balsillie said in a statement.
RIM said it believes that the loss of Canadian ownership of Nortel's technology may have national security implications and that the government should review the situation.
But Nortel responded late Monday, saying it's "disappointed" with RIM's statement.
Nortel said in its own statement that on June 30, 2009, the courts established bidding procedures for the auction of its assets and not only did RIM not object to the approval of those procedures, but RIM also "refused to comply with the court approved procedures."
Nortel has been operating under court protection from its creditors since January.
The Nortel agreement with Nokia is a "stalking horse bid that will allow another buyer to possibly make a better offer."
The deal allows Nokia Siemens to beat any rival bid that's deemed superior by paying an additional $5 million.
The wireless business is the second largest supplier of CDMA infrastructure in the world.
The sale of the wireless business to Nokia Siemens Networks includes a provision that at least 2,500 employees have the opportunity to continue working with the buyer.