Research in Motion’s shares rose 10 per cent on the Nasdaq on Wednesday amid a fresh round of reports that potential acquirers, including Amazon, had expressed interest in buying the struggling Canadian maker of BlackBerry smartphones and PlayBook tablet computers.
Although the talks took place earlier this year and were rebuffed by RIM, news of the takeover interest nevertheless saw the shares gain $1.25 to $13.77. RIM’s senior management and board appear to have ruled out a sale, at least for the moment.
Microsoft and Nokia are also believed to have considered a joint bid for RIM, though their interest has not been confirmed and both companies have made clear more recently that they are focused on developing the market for smartphones running Microsoft’s Windows Mobile.
HTC and Samsung, which both make smartphones running Google’s rival Android operating system, have also been mentioned as potential bidders, although, as with Amazon, their primary interest could be RIM’s extensive patent portfolio, which they could use to defend patent suits from rivals.
Analysts note that Google’s pending acquisition of Motorola Mobility was driven, in large part, by Google’s need to strengthen the intellectual property supporting Android in the face of an escalating patent war with Apple and others.
Analysts are divided on whether RIM’s depressed share price makes it a real takeover target. While some argue that a 78 per cent decline in the stock ahead of trading on Wednesday makes the company attractive, others emphasise that the continuing uncertainly over RIM’s strategy make a serious bid unlikely.
They also note that RIM’s co-chief executives, Mike Lazaridis and Jim Balsillie, who together hold about 11 per cent of RIM’s equity, have made clear they plan to lead the turnround effort and believe RIM can survive as an independent company. Their willingness to consider an offer is critical, and they have not shown evidence of that to date, said Rod Hall, a JPMorgan analyst.
Nomura analysts noted that “the fact that several parties have expressed an interest in discussing a merger or takeover of RIM is encouraging for RIM shareholders. However, the board’s apparent reluctance to develop this interest suggests that the company is determined to go it alone.”
The slump in RIM’s market valuation to $7.2bn follows a string of weak financial reports, service outages and concerns about market share losses to rivals, including the Apple iPhone and devices powered by Google’s Android operating system.
Uncertainly about the company’s growth prospects was further underscored last week when RIM’s senior management revealed that handsets based on its next-generation operating system, dubbed BlackBerry 10, had been further delayed and would not now go on sale before late 2012.
Many analysts fear that this latest delay makes RIM vulnerable to further market share losses in North America and other developed markets, and that higher marketing spending could wipe out profits ahead of the BlackBerry 10 launch.