Nokia Siemens Networks (NSN) will object in bankruptcy court to Ciena's $769 million purchase of Nortel's optical networking and carrier ethernet business, and is ready to raise its offer to $810 million in cash, a Nokia Siemens spokesman said on Tuesday.
Ciena trumped an offer by Nokia Siemens and its financial partner, One Equity Partners, on November 22 in a three-day auction with a bid of $530 million in cash and $239 million in 6-8 percent convertible notes due in 2017.
Bankruptcy courts are due to decide on the deal on December 2.
We can confirm we have notified the representatives of Nortel's creditors that we are willing to offer $810 million in cash for the optical networking and carrier ethernet assets of Nortel, an increase to our final bid in the auction, said Nokia Siemens spokesman Barry French.
Along with our expert advisors, we continue to believe that the convertible notes offered by the competitive bidder carry significant risk and should not be valued the same as cash, he said.
Ciena officials were not immediately available for comment.
Ciena shares rose on Nokia Siemens' plan, and were 1 percent higher at $12.28 on Nasdaq late Tuesday afternoon.
Ciena shares fell sharply after it won the auction as investors worried about how the U.S. network equipment maker will integrate the new assets, which are expected to double Ciena's size, and how it will cope with an increased debt load.
The deal, if it goes through, would vault Ciena to third place in the optical network equipment market, boosting it against bigger rival Alcatel-Lucent and Huawei Technologies Co HWT.UL.
Nokia Siemens Networks is a 50-50 venture of Nokia and Siemens.
(Reporting by Tarmo Virki; Additional reporting by Anupreeta Das in New York)