Ericsson bids for Riverstone

Ericsson this week topped rival Lucent's offer for the assets of Riverstone Networks.

Riverstone, which is conducting an asset sale under section 363 of the U.S. Bankruptcy Code, received a US$178 million cash offer from Ericsson to purchase substantially all of the assets of the metro Ethernet router company. Lucent signed an asset purchase agreement to acquire Riverstone assets for $170 million bid early last month.

But at the same time, Riverstone filed a petition under Chapter 11 of the U.S. Bankruptcy Code citing that it intended to conduct an auction for the sale of its assets under section 363 of the Code.

Lucent would not say if it would raise its offer.

"We're disciplined buyers and we'll do what is prudent for own business and for our shareowners," a company spokesman said. "We've made a fair offer, we'll continue to monitor the proceedings and we'll carefully consider our options."

Ericsson said Riverstone's Ethernet offerings would appeal to its wireline constituents.

"We recently acquired Marconi, and this is yet another step in reinforcing our position as a business partner to the fixed network operators and to work with them on the broadband convergence challenges," an Ericsson spokeswoman said.

Riverstone and its advisors are currently reviewing the Ericsson offer, the company stated. The deadline for submission of bids was March 16.

Riverstone received no bids other than the Ericsson offer by the deadline. The auction is now scheduled to commence at 10 a.m. ET on March 20 in New York.

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