Courts approve Ciena/Nortel deal

Ciena this week received court approval for its stalking horse bid for Nortel's Optical Networking business.

Judges from both the US Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice have given the go ahead for the deal, but not until changes were made to the initial proposal from the companies.

Reports have suggested that Ciena asked for a breakup fee to be paid to the company if the deal fell through, as well as asking for any other deposits from bidders not to be returned.

Judges are said to have refused these conditions so the companies had to think again before getting their approval.

A spokesperson from Nortel told IT PRO: "There were changes to the bidding procedures and a change to the termination provisions of the stalking horse agreement. We cannot provide specific details on those changes at this time. However any modifications will be reflected in the court orders which will be publicly available."

It has now been confirmed that the deadline for bids to be received for these assets is 9 November. The auction process should take place on 13 November.

Ciena made its offer of $521 million for the assets earlier this month and has been asked by the courts to put down a five per cent deposit to confirm its interest.

But regardless of how far ahead the deal has gone between the two companies there is still time for other bidders to come in and snatch the deal.

Ericsson ended up winning the auction for Nortel's wireless assets after being a late bidder back in July.