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 Any hopes that Nokia Siemens Networks BV had of sneaking off with the Nortel Networks Inc. assets by paying only $650 million are swiftly disappearing, as private equity firm MatlinPatterson Global Advisors has other ideas about the debt-laden telecom gear maker's future. The LBO shop, which already holds $400 million in Nortel bond debt, is unwilling to abandon its investment in the company and is reportedly gathering a consortium to bid on the company, according to the Financial Times. In a statement released Monday, MatlinPatterson said it "is working to put forward a competing proposal that permits this critical part of Nortel to reorganize and emerge from bankruptcy as an independent, reinvigorated, standalone Canadian-based company." MatlinPatterson's actions probably don't come as a surprise to Nokia though, as the buyout shop has objected to the sale from the start. The firm has argued in court papers that Nortel is not a wasting asset and is accumulating cash, not hemorrhaging it. Nortel had $2.7 billion in cash as of June 6, compared to $2.4 billion as of Dec. 31, the objection said. (The Deal Pipeline subscribers can see the full story here.) The Brampton, Ontario-based telephone equipment maker filed for Chapter 15 on Jan. 14, while its 15 affiliates, including U.S.-based Nortel Networks Inc., filed for Chapter 11 the same day. On June 24, Nortel said it had accepted a $650 million stalking-horse bid from Nokia Siemens for its wireless infrastructure unit -- the world's second-largest such business. The company also said at the time it would not emerge intact from bankruptcy and it would continue to sell off its businesses. Nortel is North America's biggest maker of phone equipment and has been in a decline since the tech bubble burst in 2000. Its shares were delisted from the Toronto Stock Exchange on June 24. A bankruptcy judge cleared the bidding process for the U.S. assets to begin last week. The auction is scheduled for July 24, with the hearing to approve the sale four days later. Competing bids are due July 21. - George White and Peter Moreira See Nortel auction data from The Deal Pipeline (subscription required) See Nortel's advisers from The Deal magazine's Deal Diary
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