Friday, 23 June 2017

Review of 2009: Stalking horses

By Mary Lennighan, Total Telecom
Friday 01 January 10

The demise of Nortel dominated this year's headlines, but there was also activity in the mobile space and some high-profile legal battles.

The demise of a key telecoms industry player brought the term "stalking horse" to the fore in 2009 - much as the economic crisis took the expression "sub-prime lending" to the masses last year - as rival vendors circled to pick the carcass of Nortel Networks clean. In the Total Telecom review of 2008 we picked out the Canadian vendor as an example of a company that had had a particularly tough year. "In public the company insists it is still committed to its turnaround plan, but behind the scenes Nortel is taking advice on how to proceed should that plan fail," we said, noting that entering Chapter 11 looked like a distinct possibility for the vendor. But we didn't expect it to happen quite so soon. Nortel's Chapter 11 filing came only two weeks into the new year, a move that ultimately all-but wiped the industry stalwart off the telecoms map. During 2009 the vendor has been slowly dismantled, one asset sale after another. Europe's Nokia Siemens Networks became the first stalking horse – an opening bidder that effectively sets the bar for an asset sale - in June with a $650 million offer for Nortel's CDMA and LTE assets. At the time the word on the street was that there were no other bidders waiting in the wings…

The demise of a key telecoms industry player brought the term "stalking horse" to the fore in 2009 - much as the economic crisis took the expression "sub-prime lending" to the masses last year - as rival vendors circled to pick the carcass of Nortel Networks clean. In the Total Telecom review of 2008 we picked out the Canadian vendor as an example of a company that had had a particularly tough year. "In public the company insists it is still committed to its turnaround plan, but behind the scenes Nortel is taking advice on how to proceed should that plan fail," we said, noting that entering Chapter 11 looked like a distinct possibility for the vendor. But we didn't expect it to happen quite so soon. Nortel's Chapter 11 filing came only two weeks into the new year, a move that ultimately all-but wiped the industry stalwart off the telecoms map. During 2009 the vendor has been slowly dismantled, one asset sale after another. Europe's Nokia Siemens Networks became the first stalking horse – an opening bidder that effectively sets the bar for an asset sale - in June with a $650 million offer for Nortel's CDMA and LTE assets. At the time the word on the street was that there were no other bidders waiting in the wings…

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