Ethernet equipment

Ciena Narrows It Down

4:15 PM -- Ciena has disclosed some details about how it got courts to approve its $521 million bid for the Nortel Metro Ethernet Networks (MEN) group. (See Nortel's MEN Auction Set for Nov. 13.)

Specifically, the conditions that would trigger a breakup fee have been trimmed. Ciena now gets a $16 million consolation prize (plus expenses reimbursed up to $5.3 million) only if another company closes a purchase of MEN within a year.

That seems pretty likely, but it's more restrictive than the original deal. Previously, Ciena would have gotten the money if Nortel emerged from bankruptcy or if an auction for MEN didn't happen by Dec. 11, analyst Mike Genovese of Soleil Securities Group Inc. points out in a research note today.

So, what are the odds someone else comes in with a higher bid for MEN? Pretty likely, Genovese believes.

Analyst Sterling Perrin of Heavy Reading agrees. "From my talks with Ciena, it seems they would not be willing to get into a bidding war," he says. "I think they've put in their final offer." — Craig Matsumoto, West Coast Editor, Light Reading

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