Research In Motion Ltd (RIM) advanced 11 percent in late trading on Tuesday after reports said Microsoft Corp and Nokia Oyj where mulling a joint bid, while Amazon.com Inc was considering buying the maker of the BlackBerry smartphone.
RIM “turned down takeover overtures” from Amazon because it wanted to fix its shortcomings independently, Reuters reported on Tuesday. 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 matter.
Before the reports, RIM shares had tumbled to their 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 before yesterday 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 does not own the stock.
RIM rose to as high as US$13.85 after closing at US$12.52 in New York on Tuesday.
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.
Nokia does not comment on rumor or speculation, said Doug Dawson, a spokesman for the Espoo, Finland-based company.
RIM trades at 2.83 times 12-month earnings, the lowest of any communications-equipment maker with a market capitalization greater than US$1 billion, data compiled by Bloomberg showed.
The status of discussions between Microsoft and Nokia was unclear, according to the Wall Street Journal. Amazon hired an investment bank to review a possible deal for RIM, but it did not 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. Amazon is also vying with Apple in the tablet market.