Published: 31 May, 2012
Following its surprise profit warning, RIM is exploring its strategic options, but CEO Thorsten Heins is still said to regard a sale of the company as a last resort. His board may have other ideas. Its most activist investor, Vic Alboini, has reared his head again and is heading a group of shareholders which see outright sale as the best way out of the current mess.
Alboini was prominent in last year's shareholder calls for management change and potential asset sales or break-up at the BlackBerry maker. His campaigns contributed to the re-evaluation which led to the resignation of co-CEOs Jim Balsillie and Mike Lazaridis, who were replaced by Heins. Now the chairman of Jaguar Financial says the new CEO's ideas of licensing the upcoming BlackBerry 10 operating system, or finding a strategic investor, will be inadequate to reverse the decline in sales and stock value.
He would rather attract a buyer, though it is increasingly hard to see which company would benefit sufficiently from RIM's customers and technology to pay a decent price. An enterprise player such as Oracle, IBM or Cisco could be most likely, as RIM still has significant corporate brand awareness and a powerful back end platform for messaging, mobile device management and other important elements of the mobile enterprise.
The Canadian company has previously been linked with other handset or OS majors, such as Microsoft or Nokia, but such players are increasingly building their own platforms, and the benefits that RIM would bring are dwindling - its market share is falling and its new platform, BB10, is not even here yet, let alone proven. Microsoft is being mentioned again, but it already has a handset base via its Nokia deal, which does not involve the challenges of company integration or taking on another platform. A private equity deal might be more likely, leading to break-up of the assets.
Nonetheless, Alboini said: "We would like to see a sale of the company or a break-up, and if a break-up, the sale of each of the parts. We're pushing and cajoling RIM to get to the promised land of a sale or break-up." He thinks IBM and Microsoft, and perhaps Nokia, are the most likely bidders.
RIM, having issued a warning that it would make an operating loss in its first fiscal quarter, appointed banks JP Morgan Chase and RBC Capital Markets to evaluate its strategic alternatives.
Some analysts agree with Alboini's line that the time has passed for keeping RIM intact. "It's a business model that's badly broken, but it's got assets that are worth something to somebody," David Baskin of Toronto-based Baskin Financial Services told Bloomberg.
In March Heins said partnerships were his preferred route, and licensing deals and selective asset sales have also been mooted by many sources, but he is understood still to be hostile to sell-off. This week, RIM said in a statement: "As Thorsten said on the company's fourth quarter earnings call, 'we believe the best way to drive value for our stakeholders is to execute on our plan to turn the company around'. This remains true." But some believe this has become just posturing to boost the price by implying the company is still viable on its own.