UPDATE 1-Ciena shares fall, as Nortel asset bid seen risky

* Ciena shares down 6 pct

* S&P Equity downgrades to "sell"

* Analysts see integration risks, hit to finances

* Report says Ciena offered $550 mln

NEW YORK, Oct 6 (Reuters) - Shares of network equipment maker Ciena Corp (CIEN.O) fell about 8 percent on Tuesday after analysts raised concerns about its bid for bankrupt telecom gear maker Nortel Networks Corp's (NRTLQ.PK) optical ethernet assets.

Ciena said on Monday it was in advanced talks to buy assets in Nortel's metro ethernet networks business, which includes its optical and carrier ethernet technology. Nortel filed for bankruptcy in January and has chosen to sell off its assets rather than restructure.

"We view the potential M&A as a risk -- it would transform Ciena, likely requiring significant integration efforts," UBS analyst Nikos Theodosopoulos said.

Theodosopoulos cautioned the move could weigh down Ciena's operations and shift its balance sheet to net debt, though he maintained a "neutral" rating on the shares.

The value of the offer has not been announced, but Bloomberg reported that Ciena offered $550 million -- more than many analysts had expected. Ciena declined to comment on that report.

Theodosopoulos estimated the offer may be around $350 million while RBC Capital Markets analyst Mark Sue estimated it at around $450 million. Ciena ended last quarter with cash and equivalents of $455.7 million.

Concerns about the deal prompted S&P Equity cut its rating on Ciena's shares to "sell" from "hold" and cut the price target by $1 to $13. Ciena shares fell $1.12 to close at $13.05, and fell further to $13.01 in extended trading.

While RBC's Sue saw the assets as a good fit for Ciena's portfolio, he said the question was how Ciena could pull the deal off and avoid an escalation in price.

"Ciena must also remember not to escalate its commitment .... (It) needs to have a price in mind to avoid 'the winner's curse,'" he said in a research note.

Ciena specializes in optical networking equipment and sells products to phone service providers like AT&T Inc (T.N) and Verizon Communications Inc (VZ.N), as well as to large businesses.

Toronto-based Nortel has sold a group of its wireless assets to Sweden's Ericsson (ERICb.ST) for $1.13 billion. Its enterprise business is being sold to U.S.-based Avaya Inc <AVXX.UL] for about $900 million.

(Reporting by Ritsuko Ando; Editing by Gerald E. McCormick and Richard Chang)