Symbian sale is for the best, says Psion
Bird in hand
Psion is pushing ahead with the sale of its 31.1 per cent stake in Symbian, despite dissent from its shareholder Phoenix Asset Management, which urges to push for a Symbian IPO.
The disposal of Symbian by Psion will give the Finnish mobile phone giant Nokia control over the smartphone software maker.
"The board reiterates its belief that it is in the interests of Psion shareholders to sell its interest in Symbian on the terms that have been negotiated," Psion said in its response. "If approved, the transaction will realise substantial value, reduce the risk of a reduction in value, simplify the group and allow management to concentrate on its successful core mobile enterprise businesses."
Psion also noted that "there is a growing divergence of interests between those shareholders who are customers of Symbian and those who are not. This could have an adverse effect on the value that might be achieved in the future."
Psion chairman David Potter has already given an "irrevocable undertaking" to vote in favour of the disposal of his total 12 per cent shareholding in Symbian.
Yesterday, Phoenix, which owns 13.5 per cent of Psion, said it is pushing for a Symbian IPO rather than a sale to the mobile phone giant. Phoenix has acknowledged that a Symbian IPO is fraught "with greater risks and uncertainty," but has also argued that a public offering could be far more lucrative in the long term. The investment firm is also urging other Psion shareholders to vote down the proposed sale at an extraordinary general meeting on 12 March.
In February, Psion said it would sell its Symbian shares to Nokia for about £135.7m, subject to shareholder approval. The proposed sale price corresponds to about £2.10 per Symbian share, compared to the £1.45 paid per share when Psion and Nokia purchased Motorola's stake in Symbian in October 2003. The figure eventually paid for the company is likely to change depending on the number of devices containing the Symbian OS sold by licensees in 2004 and 2005.
Psion shares dropped from £0.99 to about £0.62 on the day the sale plans were first reported.
It has also been suggested that other Symbian shareholders Siemens, Panasonic, Samsung and Sony Ericsson would be unwilling to use technology owned by their biggest competitor. This is seen as the reason number two phone maker Motorola left the consortium last year.
Psion's reasons for a quick sale rather than a sit-and-wait approach to the disposal of Symbian may be due a shortage of cash at the London-based firm. The net cash figure posted in December 2003 of £17.4m posted was down from £30.1m in 2002. However, operating profits rose to £7.5m from £5.1m the previous year.
More than ten million mobile phones currently use the Symbian's software operating system. Global shipments of Symbian operating system-based phones reached 2.76 million units in the fourth quarter of 2003, up from 0.98 million units the same period a year earlier.