RIM hamstrung in Nortel bidding process

RIM hamstrung in Nortel bidding process

The assets under the hammer are Nortel's CDMA and Long Term Evolution Access businesses, which develop current and next generation technology for wireless infrastructure and mobile devices.

RIM applied for qualified bidder status in Nortel's auction bidding process for the Wireless business, but was told it could be qualified only if it promised not to submit offers for other Nortel assets for a period of one year.

In seeking to impose this condition, Nortel and its advisors were aware of RIM's desire to purchase other Nortel assets as part of a solution to retain key portions of Nortel's business under Canadian ownership.

RIM says that Nortel, its advisors and its court-appointed monitor have rejected the company's repeated attempts to engage in meaningful discussions.

Based on its preliminary review, RIM would be prepared to pay in the range of US$1.1 billion, subject to due diligence and appropriate ancillary agreements, for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets.

RIM believes that such an offer would outrank the "stalking horse bid" made by Nokia Siemens Networks.

Jim Balsillie, RIM's co-chief executive officer, pointed out that the development of Nortel's technology has been partly funded by Canadian taxpayers. It therefore seems incongruous that Canada's own Export Development Corporation is prepared to help the technology leave the country that funded it by lending $300 million to another bidder.

"RIM remains interested in acquiring Nortel assets through a Canadian ownership solution that would serve the dual purpose of keeping key wireless technologies in Canada and extending RIM's leadership in the research, development and distribution of leading edge wireless solutions, but RIM has found itself blocked at every turn," said Balsillie.

RIM believes that the loss of Canadian ownership of Nortel's CDMA and Long Term Evolution Access businesses could have national security implications, and that the Canadian government should review the situation closely.


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