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Canada would not block RIM sale
Canada would not block RIM sale, Jim Flaherty suggests - The Globe and Mail
Just one day after Research In Motion Ltd. opened the door to a sale of the company, Canada's Finance Minister suggested his government would not block a takeover of the BlackBerry maker.
Asked whether Ottawa would protect Waterloo, Ont.-based RIM from a foreign takeover, Finance Minister Jim Flaherty told reporters in Toronto Friday that “they will be the masters of their own destiny.”
Previously, much of the frequent takeover speculation surrounding the troubled Canadian technology giant - usually involving companies such as Microsoft Corp. (MSFT-Q126.96.36.199%) or Nokia Corp. (NOK-N5.490.071.29%) - have hinged on whether Ottawa would block a sale to a foreign firm, as it did with BHP Billiton’s bid for Potash Corp. of Saskatchewan.
“We would like RIM obviously to be successful as a Canadian company, which it has been, a very innovative and successful company,” Mr. Flaherty said.
On Thursday, as RIM reported dismal fourth quarter earnings, the company’s chief executive Thorsten Heins said the company was undergoing a “comprehensive strategic review” and, when pressed, did not rule out an auction.
Mr. Heins held a remarkably bleak conference call with analysts Thursday during which he did not rule out agreeing to a takeover, discontinued offering investors forward-looking guidance due to competitive turmoil, and said RIM – a proud Canadian technology company that has always gone it alone – was now open to partnerships in areas, such as media consumption, where it was weak.
Perhaps most surprisingly of all, for a company that was renowned for its engineers’ unassailable confidence, Mr. Heins admitted for the first time that it might not actually work out in the end.
“This is not without risk and challenges,” Mr. Heins said. “And there's no guarantee of success.”
On Thursday, RIM missed its earnings guidance for the fifth straight fiscal quarter, reporting $4.2-billion in revenues, rapidly declining shipments of BlackBerry smartphones, and its first quarterly loss – of $125-million – since 2005. At the same time, long-time former co-CEO Jim Balsillie severed his 20-plus years with the company, which he helped build from a local startup to a global player, by resigning from his spot on the board.
It was also announced that several senior executives, such as chief technical officer David Yach and chief operating officer Jim Rowan, were leaving the company. A source told The Globe and Mail that this “big shakeup” was also taking place at the senior vice-president and vice-president level, as Mr. Heins – who took over when long-time co-CEOs Mike Lazaridis and Mr. Balsillie stepped down in January – begins to put his stamp on the stumbling giant.
Although the breadth of the changes now being contemplated underscored the company’s huge challenges, the fact that top management were finally acknowledging these issues gave some investors a glimmer of hope. Before its next-generation BlackBerry 10 devices come out in late 2012, Mr. Heins said he would refocus the company on enterprise clients, introduce new models of its current BlackBerry 7 smartphone lineup to help shore up market share in emerging markets against fresh competition, and focus in on RIM’s core strengths, such as security and network infrastructure.
“We felt (Thursday’s) earnings call was the first honest acknowledgment from management of the seriousness of the competitive headwinds facing RIM, with a firmer commitment to scale back and refocus resources,” wrote UBS Investment Research analysts Phillip Huang and Amitabh Passi. “It’s an uphill battle and we await a first glimpse of BB10 devices in May.”
Mr. Heins’s bold pronouncements on Thursday indicate that he has been listening to the investors who have long advocated for a strategic realignment of the company and have pushed – before the management shakeup in January, in particular – for the company’s executives to maximize shareholder value, either by abandoning market segments such as hardware entirely or considering an outright sale of the company.
But while it’s clear that there is finally acknowledgment at RIM that drastic change is necessary to halt the slide, it’s unclear whether these new moves will be interpreted as having come too late.
“The new CEO, Thorsten Heins, spoke the language of investors, providing good content and revealing openness to new strategies,” wrote National Bank Financial analyst Kris Thompson in a note to clients.
Noting that RIM executives said service revenue from wireless carriers could come under pressure, Mr. Thompson added, that “fundamentals are deteriorating faster than expected. While the stock could trade on speculation of takeover, partnerships and new strategic directions, we’d continue to avoid for now.”
- CrackBerry Genius
03-30-2012, 08:39 PM #3
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No one screaming "Canada won't let that happen!"?
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- 03-31-2012, 07:20 AM #5
guys guys guys... first off the Article title ends with "suggests" which is the opinion of the writer and is pure guessing.
In reality Mr. Flaherty did not say anything of substance one way or the other, which is expected.
The Canadian government won't officially comment on a vague question of "will you stop a sale" because the question needs to be clarified. Sell to who? What percentage? When? What are the plans of the buyer to keep infrastructure in Canada?
I guaran damn tee that if a Chinese company came to buy all of RIM and move it to China, Canada would not let it happen.
There are so many potential options, the easy answer to the question is, "RIM needs to dig themselves out of the hole they are in themselves."
RIM ain't going anywhere unless its a North American based company coming in to buy
- 03-31-2012, 08:42 AM #7Asked whether Ottawa would protect Waterloo, Ont.-based RIM from a foreign takeover, Finance Minister Jim Flaherty told reporters in Toronto Friday that “they will be the masters of their own destiny.”"Hard work spotlights the character of people: some turn up their sleeves, some turn up their noses, and some don't turn up at all." -Sam Ewing
Rollin' on Twitter
- 03-31-2012, 10:04 AM #8
- 03-31-2012, 01:48 PM #11"Hard work spotlights the character of people: some turn up their sleeves, some turn up their noses, and some don't turn up at all." -Sam Ewing
Rollin' on Twitter
- CrackBerry Master
03-31-2012, 03:06 PM #13
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RIM will "be the masters of their own destiny ", says Jim Flaherty
This implies that if RIM chooses to remain under their own structure, then Canada would block hostile takeovers.
If RIM chooses to sell, then the Canadian government will honor that with the stamp of approval.I heart my Playbook...."Sunshine, lollipops and rainbows,
Everything that's wonderful is what I feel when we're together"
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- CrackBerry Addict
03-31-2012, 05:06 PM #15
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The current federal government has blocked the takeover of Saskatchewan's Potash Corp by Australia’s BHP Billiton a few years ago. National resources is one thing. A private tech firm is another.
The current Federal Conservative government would not block a takeover or sale of a private tech company. This is not Venezuela. Canada already has some of the lowest corporate taxes in the western world to help grow and keep business in Canada. A blockade of any deal would scare potential investors away from doing business in Canada AND North America as a whole.Please sign this petition to bring Netflix to BlackBerry. Help your BlackBerry brothers and sisters.
- CrackBerry Abuser
03-31-2012, 07:11 PM #16
- 470 Posts
Let me think - how does this really effect me? .................................................. .................................................. .................................................. .......................(MMMM)..................... .................................................. .................................................. .................................................. ....
Ok, thought awhile, and surprise surprise,
doesn't effect me very much at all.
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- CrackBerry Master
03-31-2012, 07:19 PM #17
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If RIM is sold I hope they would keep BlackBerry as it's own and not introduce BB10 as a AppleBerry. "Eurika now it is just like an iphone" I think a move like that would be more devastating than when they introduced New Coke.I SLAYER :
- CrackBerry User
03-31-2012, 11:34 PM #202 + 2 = 5 (for exceptionally large values of 2)
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- 04-01-2012, 07:19 AM #22
The investment the Canadian and USA governments have in Blackberry products alone would create a situation that if RIM was sold, it would only go to a company they could trust.
I don't think the Canadian government would block any sale, but, they will be very picky about who can buy RIM.
First off, the base of RIM would have to stay in Waterloo. If the sale of RIM moved away from Waterloo if would completely devastate a WHOLE CITY and 10's of thousands of Canadians would be affected
Second, the company would have to be deemed trustworthy to hold all the secure information that the Blackberry servers hold or may hold. Thats a big one.
- 04-01-2012, 10:06 AM #23
- 04-01-2012, 11:41 AM #25