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Archive for June, 2011

Don’t bet on RIM takeover: analysts

Posted by sweens on June 24, 2011

Published on June 24, 2011
The Canadian Press

Research In Motion, once the most valuable company on the Toronto Stock Exchange, may look like a bargain today for a potential buyer, but analysts say investors shouldn’t bet on a takeover.

The list of companies that might be willing and able to make a bid for the BlackBerry maker is short with Apple and Google – two of the largest players in the field – serious rivals to RIM with the iPhone and Android operating system.

Meanwhile, Cisco is looking to streamline its business and Microsoft is working with Nokia to develop its Windows Phone software.

“If Samsung were to acquire Nokia and abandon the Microsoft relationship, then perhaps Microsoft would turn to RIM,” National Bank Financial analyst Kris Thompson wrote in a recent report on the company.

Thompson noted that HP or Dell may be interested, but HP already has Palm and it was unlikely that Dell, with a market cap of $30 billion, could pull off a deal of this size.

“IBM should technically be able to raise enough money for this deal. IBM is an enterprise-centric IT services, software and hardware vendor. This deal could make sense but is likely a long shot,” Thompson wrote.

Cormark Securities analyst Richard Tse said rumours of a takeover bid for RIM are nothing new.

Tse noted that Microsoft has most often been mentioned as a possibility, but he discounted that notion because of the software company’s deal with Nokia.

“I wouldn’t rule it out, but I think the chances of that are not that high,” he said.

Complicating matters is that none of the companies speculated about are Canadian, which makes it likely that any potential bid would come under review of the Investment Canada Act, which would require a deal to be a net benefit to Canada.

The Conservative government has killed two deals under the act including a proposed sale from MacDonald Dettwiler and Associates Ltd.’s (TSX:MDA) of its space business in 2008 and BHP Billiton’s hostile takeover bid for PotashCorp (TSX:POT) last year.

Making matters even more difficult is that RIM co-chief executives Jim Balsillie and Mike Lazaridis together hold a roughly 10 per cent stake in the company – not enough to block a hostile bid, but likely enough to cause headaches for an unwanted suitor.

RIM shares were worth more than $140 at their peak in 2008.

And even after the a precipitous drop during the turmoil of the financial crisis, to around $45, the stock had bounced back to more than $90. But since then shares have trended lower before hitting a downward slide earlier this year to trade for less than $30.

The stock was hammered last week after RIM reported its latest quarterly results, only to be given a boost after unsubstantiated rumours about the possibility of a takeover bid.

That’s not to say that RIM stock is not without value, and a potential recovery in further value if the market favours its next wave of products.

The company is pushing ahead with plans for new BlackBerrys including a touchscreen version of its popular Bold model and a transition for its new phones to the same powerful operating system that runs its PlayBook tablet.

The company also has roughly $3 billion in cash and billions worth of patents and intellectual property.

Thompson raised the possibility of a private equity investor looking at RIM, but suggested the appetite for such a deal may be low because of RIM’s declining fortunes in recent months.

“We’ve recently had discussions with private equity participants that suggest there may be an appetite for high-yield debt tied to a private equity transaction,” Thompson wrote.

“The difficulty with this type of deal is determining sustainable cash flow in a market that is fiercely competitive and probably undergoing a transition to lower gross margins across the sector.”

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Posted by sweens on June 10, 2011

You have narrowed your list of candidates after reviewing resumes and now you have a potential candidate coming in for an interview.  The interview process is the lynch pin of the recruiting process, allowing employers to identify whether the candidate has the requisite skills and abilities for the position as well as ensuring that they are the right fit for the organization. Given the importance of the job interview, asking the right questions is of central importance.   However, organizations need to be mindful about avoiding the wrong questions during a job interview since failing to do so could result in a human rights complaint.

Generally speaking, job candidates are protected by human rights legislation and care should be taken to make sure that interview questions are tailored to only get information about qualifications and job requirements. The prohibited grounds vary from province to province and federally and therefore particular attention should be paid to the specific grounds applicable to the interview.  It is also very important to note that an organization can be found liable for discrimination under human rights legislation where questions relating to a prohibited ground are asked (unless they are justified on the basis of a Bona Fide Occupational Requirement (“BFOR”)), even where the prohibited ground has no impact on the decision not to hire (or even hire) the candidate.  Where the candidate identifies disability-related needs as an issue in an interview, disability and accommodation measures related to the essential job duties can be discussed. Other than at an applicant’s request, interviewers should only discuss on-the-job accommodation after making a conditional offer of employment.

A recent case from the Quebec Human Rights Tribunal [Commission des droits de la personne et des droits de la jeunesse c. Systématix Technologies de l’information inc., 2010 QCTDP 18] serves as a good reminder to organizations that their interviewers should avoid discussing anything that relates to a prohibited ground (absent a BFOR), even if the employee brings the issue up for discussion.  Specifically, a Quebec employer was recently ordered to pay $7,500 to an applicant because an interviewer asked questions about the applicant’s Muslim faith, even though the decision not to hire him related only to his lack of experience. In the Tribunal’s view, just bringing up the subject violated the candidate’s human rights. In arriving at its decision, the Tribunal noted that it did not matter who brought the subject up, and that proceeding with questions about a prohibited ground would cause a reasonable person to feel compelled to answer them.  The Tribunal also noted that the candidate’s willingness to answer the questions did not constitute a waiver of his rights under human rights legislation. 

Bottom line: Unless questions respecting a prohibited ground relate to a candidate’s ability to perform the essential duties of the job, they should be avoided.  It should be noted that the onus to prove the questions were related to a legitimate job requirement is high.  Employers should establish a standard interview questionnaire in order to ensure that questions asked during an interview are consistent and do not tread on prohibited grounds.  Employers should provide training to all managers or supervisors who may be part of the interview process on appropriate interview etiquette, including questions which may and may not be asked.

If you have any questions about appropriate interview questions or what may qualify as a BFOR, please contact one of our e2r Solutions® service providers.

e2r Solutions®

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