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RIM Gains After Reports Say It May Have Been Takeover Target

(Bloomberg) — Research In Motion Ltd. advanced 11 percent in late trading after news reports said Microsoft Corp. and Nokia Oyj mulled a joint bid, while Inc. considered buying the maker of the BlackBerry smartphone.

RIM “turned down takeover overtures” from Amazon because it wanted to fix its shortcomings independently, Reuters reported. That was followed by a Wall Street Journal article that said Microsoft and Nokia “flirted with the idea of making a joint bid” in recent months. Both cited unidentified people familiar with the matters.

Before the reports, RIM stock had tumbled to its lowest level in almost eight years. Last week, the company disclosed a delay in a new generation of BlackBerrys designed to fuel a rebound, adding to challenges that include lost market share and a tablet device that bombed with shoppers. The 78 percent plunge in RIM’s shares this year leaves it vulnerable to an approach from suitors, said Sameet Kanade, an analyst at Northern Securities Inc.

“At this valuation, it is a strong acquisition target,” said Kanade, who is based in Toronto and rates RIM a “speculative buy.” He doesn’t own the stock.

RIM rose to as high as $13.85 after closing at $12.52 in New York. Jamie Ernst, a spokeswoman for Waterloo, Ontario-based RIM, declined to comment, as did Mary Osako, a spokeswoman for Seattle-based Amazon, and Peter Wootton, a spokesman for Redmond, Washington-based Microsoft.

Bargain Price

RIM trades at 2.83 times trailing 12-month earnings, the lowest of any communications equipment maker with a market capitalization greater than $1 billion, according to data compiled by Bloomberg.

Representatives of Espoo, Finland-based Nokia didn’t immediately respond to messages left outside regular business hours.

The status of discussions between Microsoft and Nokia was unclear, according to the Wall Street Journal report. Amazon hired an investment bank to review a possible deal with RIM, but didn’t make a formal offer, Reuters said.

Microsoft and Nokia might be able to use RIM in their rivalry with Apple Inc., the largest smartphone maker.

With Peter Burrows
MacMillan is a reporter for Bloomberg News and Bloomberg Businessweek in San Francisco.
Kucera is a reporter for Bloomberg News.

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