RIM Prevented from Bidding for Nortelís Assets as a Result of Nortelís Actions
Waterloo, ON Ė Research In Motion Limited (ďRIMĒ) (Nasdaq: RIMM; TSX: RIM) disclosed today that it has effectively been prevented from submitting an offer for the Nortel Networks Wireless Business that is the subject of a bankruptcy auction scheduled to occur on July 24, 2009. The assets being sold are Nortelís CDMA and Long Term Evolution Access businesses. In its CDMA and Long Term Evolution Access businesses, Nortel develops current and next generation technology for wireless infrastructure and mobile devices.
RIM sought to be qualified as a qualified bidder in Nortelís auction bidding process for the Wireless Business, but RIM was told it could be qualified only if it promised not to submit offers for other Nortel assets for a period of one year. In seeking to impose this condition, Nortel and its advisors were fully aware of RIMís desire to purchase other Nortel assets as part of a solution to retain key portions of Nortelís business under Canadian ownership. Despite repeated efforts, Nortel, its advisors and its court-appointed monitor have rejected RIMís repeated attempts to engage in meaningful discussions. Based on its preliminary review, RIM would be prepared to pay in the range of US $1.1 billion, subject to due diligence and the entering into of appropriate ancillary agreements, for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets. RIM believes that such an offer would result in an extremely attractive price for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks.
Jim Balsillie, RIMís co-chief executive officer stated, ďRIM is extremely disappointed that Nortelís world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada and that Canadaís own Export Development Corporation is preparing to help by lending $300 million to another bidder. RIM remains extremely interested in acquiring Nortel assets through a Canadian ownership solution that would serve the dual purpose of keeping key wireless technologies in Canada and extending RIMís leadership in the research, development and distribution of leading edge wireless solutions, but RIM has found itself blocked at every turn.Ē
RIM believes that the loss of Canadian ownership of Nortelís CDMA and Long Term Evolution Access businesses may significantly, adversely affect national interests, with potential national security implications, and that the Government of Canada should review the situation closely.
This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws relating to RIMís interest in acquiring Nortelís Wireless Business and certain other Nortel assets, the indicative price range that RIM would be willing to pay for those assets and its perception of the proposed benefits to RIM of the proposed acquisition. The phrases ďdesire to purchaseĒ, ďprepared to payĒ, ďinterested in acquiringĒ and ďextending RIMís leadershipĒ are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by RIM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RIM believes are appropriate in the circumstances, including its consideration of Nortelís assets and its perception of the benefits to RIM of a proposed acquisition of certain of those assets, including potential long-term benefits associates with Nortelís Long Term Evolution Access technology. Many factors could cause RIMís actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: as noted above, RIMís due diligence review of the Nortel assets and the partiesí ability to enter into mutually-acceptable agreements with respect to an acquisition of those assets; RIMís ability to successfully integrate the assets of Nortel into its own business; RIMís ability to augment the research, development and distribution of the technology included as part of the Nortel assets, and its ability to realize upon its anticipated growth prospects and synergies; regulatory, court and other approvals that would be required in connection with an acquisition by RIM of the Nortel assets; RIMís ability to attract and retain certain Nortel employees in connection with the proposed acquisition of the Nortel assets; RIMís ability to enhance its current products and develop new products in the future utilizing Nortelís assets; risks relating to RIMís and Nortelís intellectual property rights; RIMís reliance on carrier partners, third-party network developers and suppliers; risks relating to the efficient and uninterrupted operation of RIMís network operations center; risks related to RIMís international operations; and intense competition. Certain of these risk factors and others relating to RIM are discussed in greater detail in the ďRisk FactorsĒ section of RIMís Annual Information Form, which is included in its Annual Report on Form 40-F and RIMís MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov), and RIMís other public filings with the Securities and Exchange Commission and Canadian securities regulators. These factors should be considered carefully, and readers should not place undue reliance on RIMís forward-looking statements. RIM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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