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It looked for a while that the once proud telecommunications giant that was Nortel, might quietly fade into memory as its assets were auctioned off one-by-one to the highest bidder. Now, thanks to an escalating battle featuring BlackBerry maker Research In Motion (RIM), Nortel is once again in the spotlight. In fact, it appears to be more popular than ever before.
The moguls over at RIM are in a snit after it claims the company, or at least what remains of Nortel, has repeatedly blocked its attempts to bid on certain Nortel assets. In particular, RIM would like to get its hands on the company’s CDMA and Long Term Evolution (LTE) wireless access business. In a series of statements, RIM says it has been trying to buy the Nortel assets for more than a year and as a plug clearly aimed at the Canadian government, has pledged to keep the wireless business in Canada.
“Despite repeated efforts, Nortel, its advisors and its court-appointed monitor have rejected RIM’s repeated attempts to engage in meaningful discussions,” the company claimed in its statement. “Based on its preliminary review, RIM would be prepared to pay in the range of US $1.1 billion, subject to due diligence and the entering into of appropriate ancillary agreements, for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets. RIM believes that such an offer would result in an extremely attractive price for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks.”
In an ideal world, the highest bidder would simply walk away with the business and that would be the end of it. But this is no longer a straight business deal. RIM has thrown the political card into the field of play. Already the country’s Industry minister has hinted that a Canadian bid would be a preferred option and he has encouraged the parties to go back to the table. Keep in mind, as well, that Nortel was once the largest publicly traded company in Canada – at least largest by market cap – and there is still a considerable amount of pride invested in the company and what might have been.
RIM also hinted in its statement that if the CDMA and LTE business were to fall into the hands of foreign interests, it could have “potential national security implications, and that the Government of Canada should review the situation closely.”
The national security claims seem to be a bit of a stretch, but it would be good to see Canada continue to be a leading player in telecommunications. And, at the very least, it's nice to see Nortel is going out with a bang instead of quietly fading away.
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