Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – A new bidder apparently will enter the bankruptcy bidding battle today for Nortel’s enterprise business.

Siemens Gore reportedly will make an offer for the group as the deadline passes for bids in the auction sanctioned by U.S. and Canadian courts. The only other known bidder is privately held Avaya which has said it would pay $475 million.

The bidding battle is big news for Nortel’s 1,800 member work force in the Triangle. Most of them are involved in the enterprise group.

Mark Evans, a frequent contributor to Local Tech Wire about Nortel, in his “All About Nortel” blog. The National Post in Canada is in its Friday editions.

As the court-approved “stalking horse” bidder, Avaya has the right to top other bids when the formal auction takes place Sept. 11. Nortel has already sold its wireless business to Ericsson.

However, the Avaya bid faces regulatory challenges in the U.S.

According to Evans, a bid from Siemens Gore would be good news for Nortel debt holders (including former employees and retirees) in several ways. One, the auction price could go up. Two, a Siemens Gore buy would help preserve the enterprise unit while an Avaya acquisition could lead to a variety of changes.

“ Siemens believes it would be better fit because most of Nortel’s existing Canadian and U.S. dealer and customer channels would stay intact – compared with Avaya’s bid in which the dealer and customer channels would be morphed into Avaya’s channels,” Evans wrote.

Evans also noted that MatlinPatterson, a New York private equity firm that owns some $400 million in Nortel debt, is concerned about an Avaya purchase.

“One of the major concerns is that if that Avaya’s bid is successful, Nortel would have to continue to support and finance the business until Avaya was able to win anti-trust approval from the U.S. Department of Justice – a process that would take months,” he explained.

The Canadian newspaper, meanwhile, speculates that MatlinPatterson might even enter the bidding in an effort to drive up the price. MatlinPatterson fell short in its efforts to buy the wireless group.

The National Post also reported that Siemens sold off some assets to generate cash that could be used in a possible bid. The newspaper noted that a Siemens-Nortel deal also could be a better fit in terms of products and services.

“Observers suggest Nortel’s enterprise division, which makes network equipment such as routers, IP phones, switches and related security products for large corporations, would fit well with the end-to-end communications infrastructure Siemens currently sells,” the newspaper said.