RIM Gets a Serious Suitor
Research In Motion Ltd. (NASDAQ:RIMM), kicked off the new week with the good news that Samsung Electronics Co. may be interested in buying the troubled company. The company’s stock saw an 8.9 percent rise to $17.61 by midday trading.
While Samsung has expressed interest in buying RIM, a deal has not been made. The company is asking too much money, according to the blog BGR.
By acquiring RIM, whose stock suffered from a 75 percent decline in 2011, it would give the Korean electronics company an operating system that could separate it from the competition, such as Apple Inc. (NASDAQ:AAPL). Samsung currently produces phones based on Google Inc.’s (NASDAQ:GOOG) Android software and Microsoft Corp’s (NASDAQ:MSFT) Windows Phone, which is used by HTC Corp.
In a note by Morgan Keegan and Co. analyst Tavis McCourt about the acquisition, he wrote, “This has been speculated before, and it does have logic to it in the sense that Samsung has no …
viable high-end smartphone operating system, and increasingly reselling Android or Windows Phone is being viewed as a commodity business.”
With last year’s introduction of its BlackBerry models featuring touchscreens and upgraded browsers, it didn’t inspire RIM’s customers to upgrade; instead they purchased competitor’s devices such as the iPhone and Android. The company saw its share price drop and the investment firm Jaguar Financial Corp. suggested RIM break into two companies, find a buyer and make management changes.
Since August, RIM has seen its stock rise at least 5 percent more than 10 times on speculation on a valuation drop and a takeover, according to Bloomberg.
RIM has also faced a decline in U.S. mobile-phone subscribers in the three months through November, declining to 6.5 percent from 7.1 percent from the previous quarter, according to research firm ComScore Inc. Meanwhile, Samsung reported a rise in subscribers during the same time period to 25.6 percent from 25.3 percent; Apple increased from 1.4 percent to 11.2 percent.
If an acquisition doesn’t happen for Samsung, McCourt believes RIM could sign a technology- licensing deal with them. Neither a RIM spokeswoman nor Samsung representative commented on the news.