Technology: Dec 28, 2011

Ottawa: For beleaguered investors in Research in Motion, a sudden collapse of the company's stock price through the end of 2011 was cause for optimism. In December, shares of BlackBerry maker spiked reports that a number of technology giants could be suitors.

But optimism is fleeting, the company has struggled with service failures, poor product introductions and declining market share. RIM's shares have fallen 75 percent since February.

As concerns mount and the stock drops, RIM is looking like a strong takeover candidate without suitable prospects.

"Before you talk to the buyer, you have to ask: Are you a seller?" BGC Partners analyst Colin Gillis said in New York. "It's a common question."

Potential suitors are likely to have a strong resistance to Jim Balsillie and Mike Lazaridis, co-managers. Collectively, they own more than 10 percent, making them the largest shareholders.

RIM is a point of pride in the Canadian government, which is increasingly willing to let foreign companies buy large national companies. In a recent press conference, Stephen Harper, Canadian Prime Minister offered a note of support for RIM, said: "We all know that it is important to the Canadian company."

RIM, based in Waterloo, Ontario, said it does not comment on "rumors and speculation" as a matter of policy.

Despite the company's well-publicized problems, RIM is still an attractive target. Even undermine its market share in North America, the company continues to expand its customer base overseas, and now reports nearly 75 million users worldwide. And the BlackBerry brand is the first choice for security-conscious users like law enforcement, and financial services companies. During the first nine months, RIM said it earned $ 1290000000.

At the end of Wednesday's $ 14.87, the price is also appealing. Alkesh Shah, an analyst at Evercore Partners, it was found that the company was worth closer to $ 22.50 per share, even assuming that the mobile phone business is essentially worthless. Shah said that RIM's network, which carries traffic across the world and the world produces the monthly subscription fees, was worth about $ 12.50 per share, the company's patents, it is estimated around $ 7.50 per share. The company also has $ 2.50 per share in cash, he estimated.

Still, RIM has to swallow a big acquisition, limiting the pool of buyers.

"You have to remember that it takes 10000000000 $, $ 12 billion $ 13 billion," said Gillis of BGC. "It's a lot of money. There's not a lot of people who want to spend that kind of money."

The most obvious suitor for Chinese mobile phone manufacturer is RIM. Such companies, which typically operate contract manufacturers of famous brands, lack of a significant presence outside of Asia. ZTE, for example, is a small, low-end player in North America and Europe. But this is the fourth largest handset maker in the world according to IDC, the company that keeps track of the technology markets.

RIM, ZTE would also recognized brand in its portfolio, reflecting its global ambitions. This year, the Chinese company announced plans to produce high-end phones under its own name, in part, focusing on Western markets.

Wednesday, December 28, 2011

Despite RIM takeover talk, hurdles would be high

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