Nortel Networks stunned the industry in September by announcing it would seek to sell its fast-growing Metro Ethernet division, which also includes most of its optical products. The worst part, most observers agreed, was the timing. How could Nortel find a buyer when nobody had any money?
Two months later, some analysts say a deal is unlikely as ever. Scotia Capital’s Gus Papageorgiou wrote in a research note this week: “Although we believe more than 30 entities have expressed interest in the company’s Metro Ethernet Networks unit, we expect it will be difficult for Nortel to get a cash deal done, at its desired price, until the macro environment stabilizes.”
“There is also a good possibility of a deal not happening at all,” he added, pointing to Huawei Technologies’ move last month to take its cellphone manufacturing unit off the M&A market until the economy improves.
Some analysts are predicting Nortel will announce 3,000 to 5,000 layoffs when it reports its quarterly earnings on Monday. So have a good weekend, Nortel employees.
Who do YOU think will buy Nortel’s MEN unit? Infinera is mum on the subject. Post your predictions and recommendations below.