Lucent to Spend $207M for Riverstone
The two companies squared off in an auction on Monday following Ericsson's bid of $178 million for Riverstone, an offer that was $8 million better than Lucent's original agreed-upon purchase price. But, when the final gavel came down, Lucent prevailed and now that company gets Riverstone's assets out of bankruptcy.
Lucent's final bid was $207 million in cash and the company modified its purchase agreement from February 7. So it is paying a 21 percent premium over its original bid, thanks to the bidding up by Ericsson. (See Ericsson Wants Riverstone and Lucent Gets Riverstoned.)
The terms of the deal are subject to final approval by the bankruptcy court, and that hearing is set for March 23.
Ken Wirth, president, Multimedia Network Solutions, at Lucent, said in a prepared statement that "Riverstone's people and products will play an important role in advancing Lucent's end-to-end converged Ethernet/optical solutions and helping us in our efforts to take share of a growing carrier Ethernet market."
The parties currently expect the transaction to close in early April.
SEC filings reveal that Lucent has made an $11.9 million cash deposit which will be credited to the purchase price upon the closing of the transaction. The purchase agreement says Lucent will have to pay a $5.1 million breakup fee, along with reimbursed expenses of up to $1 million, if the deal falls through.
— Phil Harvey, News Editor, Light Reading