Thursday, April 19, 2012

Who would want to buy the maker of the Blackberry? Bloomberg reports that RIM has hired J.P. Morgan

Bloomberg reported this morning that Research In Motion (RIM), the maker of the BlackBerry has hired J.P. Morgan, confirming an early report that the company would be hiring a banker.

The Bloomberg report, as it should, dances around the subject of whether this means the entire company (or some of its major assets) will be put up for sale. It uses the technique of letting someone else say it, quoting a William Blair analyst as saying "the way I interpret hiring a banker is to sell parts of business, an outright sale or an equity stake by a third party."

Well, here at TNM, there is no reason to beat around the bush: hiring this particular banker means a sale, just as the Blair guy says.

For a couple of years of my career I was in the mergers and acquisitions game – I often think I should have stayed there as there is certainly more money to be made selling media properties than there is managing them, right?

One gets to know who is the consultants and who are the M&A players. All the M&A guys will tell you they are also consultants and analysts, but don't believe it for a second. The money is in M&A and those companies always recommend a sale.

Of course, the problem with RIM is who would buy it? Samsung seems like the logical choice. They have a ridiculously large array of products, flooding the market with so many models that one needs Excel to keep track of them all. If the price were right, why not just add the BlackBerry?

The WSJ speculated a couple of weeks ago that maybe Microsoft would want to buy. They already are working with Nokia, of course, but could buy RIM and market it through Nokia, helping out their partner (who definitely needs help if you've read this post).

The WSJ story also mentions Amazon, which is an intriguing idea. They also mention Samsung.

Another buyer, and one that I'm sure J.P. Morgan would love to find, is a private equity company (or companies). Sales to PEs are always profitable because within a number of years the PE will be selling and the original M&A firm often picks up the deal. Funny how that works, isn't it? Makes you wonder if your "consultant" is really consulting for you or the buyer?

Well, that's the way the game is played once you have thrown your company to the wolves.

This morning Nokia reported really, really bad sales numbers. Later in the morning, Nokia then announced that Colin Giles, executive vice president of sales, had resigned. Nokia said the resignation is "to be closer to his family". Come on, he's not a politician, is he?

Not surprisingly, his position will not be filled, as the company seeks to trim costs.