All appears quiet on the Nortel auction front with no public news or statements since Monday. Should we be surprised by this? We don’t think so.
Our sources state that that there may have been as many as 100+ expressions of interest, slimmed down to around 40 companies that were allowed access to conduct DD. Add to that some late entrants and this would suggest multiple bidders. More than 10 would be very hard to manage, up to 10 genuine competitive bids looks very possible.
Add to that, we expect bidders to bid on many different bases, for all or different parts of the portfolio.
Add to that, we expect that the sellers will want to consider if bidders can be combined, including getting two bidders to co-own the portfolio, or part of it, to optimise the return for creditors in a two for the price of one attempt, which should work at least in legal theory (a bit like being co-married to the same wife or husband, it would not be entirely satisfsctory but if she/he were perfect in private then you might cope with the public embarrassment–I think).
Making an educated guess, expect the sellers to issue a public statement in the next 48 hours announcing the numbers of bids received and their likely timeline for this round to be completed, expressing delight (or something similarly self-congratulatory) at the success of the process to date and very little else.
We expect to be blogging about this for a few weeks yet. Of course we could be entirely wrong and this post could be overtaken by events within hours. But we are talking here about an asset that could represent a large increase in the returns to Nortel creditors. Cynically speaking, we don’t see Cleary Gottlieb calling a halt to to process any time soon.