Reuters is reporting that Siemens AG and the Gores Group are preparing to bid against Avaya for Nortel Enterprise.Gores/Siemens, under the name Enterprise Networks Holdings (ENH), filed an objection to the bidding procedures for the auction of Nortel Enterprise--a process of which Avaya's $475 million "stalking horse" bid was the opening shot.
According to the court papers, the Siemens/Gore motion claims that the auction proceedings as currently constituted give Avaya an unfair advantage in the process, and ask that all qualified bidders be given all information on Nortel Enterprise that Avaya received, and all documents related to the sale of Nortel Enterprise to Avaya. The filing claims that current bidding procedures require qualified bids to be sent to Avaya when those bids are filed, but in any event no later than two days before the auction. In contrast, according to the filing, these competing bidders are only entitled to see all qualified bids one day before the auction.
"ENH cannot understand why Avaya should receive copies of Qualified Bids and not other Qualified Bidders," the filing states. "Moreover, Qualified Bidders cannot realistically be expected, in the course of one single Business Day, to evaluate Qualified Bids and determine a means of offering a higher bid at the Auction."
Gores/Siemens is also asking the court to set September 30 as the date for the auction.
MatlinPatterson, a private equity firm and Nortel bondholder, also filed objections to the sales process for Avaya to acquire Nortel, primary citing two concerns: That the process provides insufficient backup provisions in the event that Avaya runs into antitrust challenges over the Nortel buy; and that the process doesn't put enough pressure on Avaya to close the deal within the prescribed seven-month time span. MP criticizes the agreement for lacking--and this is your fun legal term for the day--any "hell or high water clause," defined in MP's filing as "requiring Avaya to do all things necessary to close the transactions."
