Tom Sweeney

It's a coming of age tale….

Posts Tagged ‘Nokia’

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.”

http://www.obj.ca/Technology/2011-06-24/article-2611098/Dont-bet-on-RIM-takeover%3A-analysts/1

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2009: A year of flux in Ottawa tech

Posted by sweens on December 18, 2009

Published on December 15th, 2009

Jim Donnelly
Ottawa Business Journal

Heady startup activity counteracted by liquidation of various headquarters

It’s been a year of soul-searching, self-help and growing foreign influence for Ottawa technology industry, say observers, but they add that doesn’t mean it’s been a bad 2009 – quite the opposite, in fact, depending on with whom you speak.

But what were the main trends we saw this year, according to those in the trenches? Most obvious, says Pat DiPietro of VG Partners, was the conspicuous absence of venture-backed, early-stage companies hatched in the nation’s capital this year. “The lack of capital has created a gap in the sequence of planting crops and then husbanding them along,” he says.

That’s led to a diversification amongst the Ottawa tech scene from traditional telecom and other technology infrastructure markets, into more lithe, media-style software and social media companies not requiring heavy injections of initial capital.

“(OCRI) likes to continue the mantra that we’ve got a lot of companies starting these days, but they’re all two- or three-person operations,” he adds. “And they’re being bootstrapped.”

OCRI chief executive Claude Haw agrees that 2009 was a year of diversification for local firms. He says this past year was a “coming-out” period for digital media in the city, adding that his organization is now tracking around 200 local companies in the space.

“And the other trend was the retooling that’s gone on in the region,” he says, adding that programs such as Lead to Win are indicative of a series of initiatives recently launched to assist budding entrepreneurs.

But 2009 also saw its fair share of formerly Ottawa-headquartered companies bought and sold by foreign interests. The Nortel saga – which by December had seen the company sell off chunks of its former businesses to companies such as Nokia-Siemens, Ericsson and most likely Ciena, as well – needs little explanation. In June, local success story Tundra Semiconductor was bought by Silicon Valley-based IDT, trumping a bid by rival Gennum Corp. In September, it was revealed that Philadelphia-based Versa Capital would take local defence products maker Allen-Vanguard private. And in late November, Corel Holdings announced that Vector Capital’s all-cash offer for all outstanding Corel Corp. shares had been successfully completed.

Mr. DiPietro says the influx of foreign ownership isn’t a good sign for Ottawa, since it means the dissolution of executive office training grounds for nascent management teams.

“One of the problems with foreign owneship is that the decisions aren’t made here, and so we’ve allowed ourselves to fall into a bad situation,” he says. “We’re in the situation where we’re becoming a branch plant again. We were somewhat out of that for a while (in the late 1990s and 2000s).

“It’s really disturbing, because the problem we’ve always had in Ottawa will be reinforced – we’ve never had lots of management teams here who could create world-class companies. And as those functions get centralized, our people won’t be trained to be great managers.”

Mr. Haw takes a somewhat different angle to the foreign ownership question. He says most consolidation has happened in mature sectors, where there’s always been a constant push to become bigger and more market-dominant. “It’s all about the big, broad market opportunities with these sectors,” he says. “And unfortunately Nortel didn’t make it as a consolidator – they became consolidated.

“But if you look at Alcatel compared to Newbridge Networks, that consolidation has worked in our favour. We’ve had more high-paying jobs locate here after that merger, than if Newbridge hadn’t consolidated.”

And as for the effect of the Nortel consolidation, Mr. Haw says locals shouldn’t think of it as a loss of one, large anchor tenant – indeed, he says it’s almost a misnomer to think of Nortel as an Ottawa company, since they haven’t been headquartered here for years. Instead, thanks to the increased presence of world-class firms such as Ericsson and Nokia, Mr. Haw says we should look at the situation as the gaining of three or four new anchor tenants.

“When a company like Nortel is acquired by Ericsson it brings stability,” he says. “Look at Cognos. They’re now bigger and better than they ever were (before being acquired by IBM).”

http://www.obj.ca/Technology/2009-12-15/article-281645/2009%3A-A-year-of-flux-in-Ottawa-tech/1

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