Research In Motion Ltd. (RIM), the troubled maker of the BlackBerry smartphone, is in talks to hire a financial adviser to help it weigh strategic options, according to four people with knowledge of the matter.
A decision to work with at least one bank could come in the next few days, said one of the people, who asked to remain anonymous because the deliberations are private. RIM would prefer an agreement to license its mobile-phone software, and its next choice is a strategic investment, one person said. RIM doesn’t plan to sell itself, the person said.
RIM said last month that it’s weighing strategic changes after market-share losses to Apple Inc. (AAPL)’s iPhone and handsets that use Android software led to five straight quarters of sales shortfalls. RIM Chief Executive Officer Thorsten Heins said that while the Waterloo, Ontario-based company would consider a sale, that wasn’t “the main direction” he’s pursuing.
A deal to license the BlackBerry operating system to a partner such as Samsung (005930) Electronics Co. would be the “best option,” said Matt Thornton, an analyst at Avian Securities LLC in Boston. Given RIM’s cash holdings, a strategic investment “doesn’t make a ton of sense,” he said. The company had $1.77 billion in cash and short-term investments as of early March.
Tenille Kennedy, a spokeswoman for RIM, declined to comment, citing company policy not to discuss market rumor or speculation.
Canadian, Global Banks
The company is considering hiring one Canadian bank and one global bank, two of the people said. RIM’s stock has declined 75 percent in the past 12 months amid rivalry from Apple and smartphone makers that rely on Google Inc. (GOOG)’s Android software. RIM shares fell 0.5 percent to $13.35 at 10:34 a.m. in New York.
Heins, who replaced co-CEOs Jim Balsillie and Mike Lazaridis in January, said on March 29 that RIM will redouble efforts to attract business customers while reviewing options, such as licensing, partnerships, joint ventures and other ways to “leverage” assets.
Other options include finding ways to wring more money from its messaging service and patents portfolio, which are its most valuable assets, the people said. Microsoft Corp. (MSFT) and Samsung could be among the interested parties, the people said.
If RIM were to put its patents up for sale, Microsoft would be interested in taking a look, according to a person with knowledge of the matter. The company is unlikely to seek a strategic investment in RIM or an outright acquisition, this person said.
Kevin Kutz, a spokesman for Redmond, Washington-based Microsoft, declined to comment, as did Chris Goodhart, a U.S. spokeswoman for Suwon, South Korea-based Samsung.
RIM’s top priority is finding a bank that can advise the company on potentially licensing the new BlackBerry 10 operating system, currently under development, a person said.
RIM plans to give software developers prototypes for the first BB10 phones in early May. It’s preparing a consumer device with the software to revive U.S. sales, which plunged by more than half last quarter.