Amazon weighed buying RIM

2011-12-21 09:33

kalahari.com

  • Walking the Amazon
    Ultimately though, Amazon is an account of a world-first expedition that takes readers on the most... Now R133.00
    buy now
New York - Research In Motion has turned down takeover overtures from Amazon.com and other potential buyers because the BlackBerry maker prefers to fix its problems on its own, according to people with knowledge of the situation.

Amazon hired an investment bank this summer to review a potential merger with RIM, but it did not make a formal offer, said one of the sources. It is not clear whether informal discussions between Amazon and RIM ever led to specific price talk, or who else had approached RIM about a takeover.

RIM's board wants co-chief executives Mike Lazaridis and Jim Balsillie to focus on trying to turn around the business through the launch of new phones, better use of assets such as BlackBerry Messaging and restructuring, two sources said. They did not want to be identified as the discussions are private. RIM and Amazon declined to comment.

While RIM could strike technology licensing deals and other kinds of commercial partnerships to boost revenue, an outright sale or joint venture is not on the cards for now, they said.

"They have had approaches from folks who have wanted to have discussions," said one head of technology investment banking at a Wall Street bank. "The issue is it is hard to find a value that makes sense with a falling knife."

Market value plunged

RIM's market value has plunged 77% in the last 12 months to about $6.8bn following a series of disappointing quarterly reports, delayed phone launches, weak sales of the PlayBook tablet and other missteps. The shares tumbled last week on weaker-than-expected quarterly results and the announcement of a delay in the launch of the new BlackBerry 10 phones.

Activist shareholder Jaguar Financial Corp has called for a sale of RIM - as a whole or in separate parts, such as the handset business or the patent portfolio.

But RIM's management has told interested parties they do not want to sell or break up the company at this juncture, the sources told Reuters. After last week's news, the board instructed the co-CEOs to set aside any options for a sale, one person briefed on the situation said.

"Selling the company or an economic joint venture is probably not in the cards right now," said the source. "Until you stabilise the platform, people are going to be very nervous about spending $10bn or more."

Some potential corporate and private equity suitors are holding out for RIM's valuation to fall further, people familiar with the matter said.

Amazon, RIM still in discussions


Amazon and RIM are still discussing ways to expand their commercial ties, which currently include a service launched last year to make Amazon's music catalogue available to some BlackBerry users, according to the sources.

Amazon launched the Kindle Fire tablet in November, which, along with the content the company can package with it, is seen as a potentially formidable contender to Apple Inc's iPad and iTunes store. Amazon does not make smartphones.

As for RIM, it feels it could better "leverage" its assets, such as the BBM instant messaging and the network operation centres that allow for messages to be processed, the sources said.

RIM could also look at licensing out its QNX operating system after the late 2012 launch of BlackBerry 10, which will be the first smartphones using that software, to give handset makers an alternative to Google's Android operating system.

Distraction

RIM's co-CEOs have spent months listening to ideas from a investment bankers, strategic parties and private equity firms. These discussions are now viewed as distracting for management, sources briefed on the situation said.

One of them said the board has backed both Lazaridis and Balsillie, but is of the view RIM needs to develop a "deeper bench" of executives.

Spurred by RIM's share drop and Google Inc's $12.5bn bid for Motorola Mobility Holdings Inc in August, Wall Street bankers have tried to pitch RIM to other mobile phone makers, including Samsung Electronics and HTC Corp, in recent months.

But HTC and Samsung already have licensing agreements with Google's Android and did not see the value in tying up with BlackBerry, people familiar with the companies said. Samsung and HTC declined to comment.

Read more on:    amazon  |  blackberry  |  mobile
NEXT ON NEWS24X

SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/Movies
 
Traffic
Lottery
 
  • Wednesday Cape Town - 20:17 PM
    Road name: MetroRail
    Due to extensive vandalism on the Central Line a limited Bus Service will operate between Nyanga/Chris Hani and Nyanga/Kapteinsklip - EXPECT DELAYS
  • Wednesday Montague Gardens - 19:58 PM
    Road name: Montague Drive
    ROADWORKS - lane closures both directions for BRT lane construction - expect DELAYS
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Up to 60% off - clearance sale!

Save up to 60% on appliances, books, electronics, toys, movies and more. Offer valid while stocks last. Shop now!

Deal of the Week!

Get bestselling John Green novels now just R99 each! Hurry and get yours while stocks last. Shop here.

Mind blowing deals on beauty & fragrances

Save up to 30% off beauty and fragrances. Offer valid while stocks last. Shop now!

Up to 50% off hair care products!

Save up to 50% on professional hair care products at kalahari.com. Offer valid while stocks last. Shop now!

30% off academic books

Score a mind blowing 30% off academic books! Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

BlackBerry Curve 3G 9300

Keep it together Text. Email. Social. With all the different ways to...

From R2499.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

It is the end of the month and there may be a strong focus on organising finances. You may have found a need to reconstruct or...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.