Nortel should welcome Canadian bids: Ottawa

The federal governmentwould like to see a Canadian company consideredamong potential buyers as Ottawa-based Nortel Networkssells off its assets in a bidding process, Industry MinisterTony Clement said Tuesday.

Companies had until 4 p.m. Tuesday to submit bids for the wireless business.

BlackBerry maker Research In Motion Ltd., however, said Mondayit has effectively been prevented from submitting an offer for the Nortel wireless business because of its desire to buy other Nortel assets as well.

Clement said he wascontacted by RIM on Mondayabout beingscreened out of the bidding process. He said he hopes the two companies will be able to meet.

"What I'm hoping will happen is that now that this thing has blown up a little bit in the media that Nortel, who has their side of the story as well, and RIM can actually convene a meeting and maybe resolve some of the procedural difficulties," he said.

"We do not want to be a hindrance, but at the same time, we cannot favour one bidder over another."

Clement said he would like to see a Canadian company considered in the process if that company is not the one that wins the final bid.

RIM said it has put forward a strong effort to qualify.

"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 $1.1 billion US for the CDMA (Code Division Multiple Access) and Long Term Evolution Access businesses and certain other Nortel assets.

Nortel, however, said the bidders have been told they have to comply with court-approved bidding procedures if they want to qualify.

In a statement, Nortel said RIM applied to become a qualified bidder on July 15.

Nortel said the two companieshad been in discussions about terms of confidentiality concerningNortel's assets, butRIM had "refused to comply with the court-approved procedures."

"Nortel continues to be willing to provide RIM with the opportunity to participate in the auction and, even without RIM's participation, believes that an active auction will result in maximizing the value of Nortel's assets."

Tuesday bids

Nokia Siemens has made a $650-million US offer for Nortel's wireless division, but late Tuesday, anothercompanyannounced it would compete for those assets.

Matlin Patterson, an equity firm from New York, said it has submitted a proposal to buy the business for $725 million.

Matlin Patterson said it consulted with several former Nortel executives when it crafted its proposal.

It says it wanted to prevent a "fire sale" of the company's core assets by creating a stand-alone company that would be the first step toward a "reorganized, viable and strong new Nortel."

Nortel has said it won't announce who has submitted bids.

Creditor protection

Nortel has been operating under court protection from its creditors since January.

Theagreement with NokiaSiemens is considered a "stalking-horse" dealthat allows potential buyers to make better offers, Nortel said. It alsoallows Nokia Siemens to beat any rival bid that's deemed superior by paying an additional $5 million.

Nortel's 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 for the buyer.

Nortel'sauction takes place Friday.