A hostile take-over may, from time to time, seem like corporate pirates sailing the high rise sea’s of business, raiding the towering headquarters of those unlucky enough to pass by. Thankfully not all corporate mergers take the form of a Monty Python hostile take-over, some just make sense.
Take for example the latest rumor, IBM has approached RIM with talk of acquisition. IBM is very interested in RIM’s Enterprise division which is responsible for the companies e-mail and messaging server software, along with the clients that use it of course. The key to RIMs success in Enterprise revolves around secrets staying that way. With advanced encryption algorithms integrated into the platform RIM has the only widely available and truly secure communications platform.
While RIM’s is a perfect fit for IBM, RIM’s market value is the major factor making RIM such an attractive target for take-over. The Enterprise Division is estimated to be worth between $1.5bn and $2.5bn while RIM’s entire market capitalization is only $4.17bn a mere 5% of its peak value in 2008. The tech bargain of the year.
In the last year a number of suitors have also approached RIM, only for her to play hard to get. Amazon, Microsoft and last month Samsung all made approaches, Samsung was so shocked at being turned down that they immediately sidled up to AMD like the RIM thing never happened. Unfortunately this started a whole new round of rumors and take-over speculation. Yesterday Samsung and AMD confirmed it was a rebound relationship and a bad idea all round.
While all of these dalliances are occurring the world continues to turn of course, even RIM isn’t standing still. RIM will release their updated phones in the next month. The BlackBerry 10 will reinvigorate RIM’s product line but it’s doubtful that it will attract users away from Apple or Android.
The good news continues for RIM with another round of staff lay-offs due this week, with another 3,000 people across all divisions leaving the company. Trying to battle the image of a company in a slow death spiral RIM CEO Thorsten Heins recently discussed spinning of the handset division to concentrate on its core business. Here at Highpants we aren’t sure who would buy RIM’s handset division, meaning a spin-off in this case would be a shutdown of the division.
It doesn’t take a room full of psychics to see that in spite of the product updates the handset division (phone and tablet) of RIM will continue haemorrhaging money. Unable to sell the handset business the lay-offs will continue until early 2013 when RIM is visited by the corporate pirates, though the flag on the pirate ship is hazy. As an interesting last minute twist IBM may be beaten to the punch by Oracle who have been seen sniffing about.
The corporate world can be a sordid and complex one, with rumor and speculation rife there are bound to be more twists and turns before this story is over.