Analysis: Google deal ups RIM's allure, but for how long?

Mon Aug 15, 2011 5:09pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Google's $12.5 billion bid for Motorola Mobility brought a 9 percent gain for the beaten-down stock of tech rival Research In Motion on Monday as investors calculated what a similarly bulging premium would do for the BlackBerry maker's asking price.

But it also means one more well-heeled suitor has shunned RIM as a potential target, leaving Canada's best-known company to go it alone as other big tech players pair up.

"The challenge is increased for RIM here. They're left without a dance partner," said Susquehanna Financial analyst Jeff Fidacaro.

Google offered a generous 63 percent premium for Motorola Mobility as it sought to build up its patent portfolio.

A similar premium to RIM's price on Friday would value the company at something over $20 billion.

RIM is still dominant in corporate communication, but it is struggling as employees seek to pull corporate memos onto their own devices, often an Apple iPhone or iPad or perhaps a device that uses Google's Android technology.

There are persistent rumors of Microsoft as a possible suitor. But neither company has shown any taste for the tie-up and Microsoft recently turned toward Nokia as its preferred smartphone partner with a deal for Nokia to abandon its own software and adopt Windows Phone.

Nokia's U.S. listed ADRs rose more than 17 percent as investors singled it out as the likely focus of any enhanced Microsoft attention now that Google has targeted Motorola.   Continued...

<p>A woman holds the RIM PlayBook in Toronto, April 19, 2011. REUTERS/Mark Blinch</p>