Lenovo executive dismisses Nokia bid talk as ‘joke’
Nokia shares have dropped more than 70 per cent since it unveiled its strategy shift of adopting Microsoft software in February 2011. — Reuters picHELSINKI, Aug 1 — A senior executive at Chinese personal computer maker Lenovo dismissed market speculation that the company was interested in buying struggling Finnish cellphone maker Nokia as a “joke.”
Shares in Nokia rose as much as 17 per cent in heavy volumes earlier today on market talk that Lenovo may be interested, but gave up the gains after executive Gianfranco Lanci’s rebuttal.
“This must be a joke,” Lanci, who runs Lenovo’s operations in Europe, Middle East and Africa, told Reuters. “There’s nothing ongoing.”
Nokia has been trying to reverse its decline in the smartphone market by adopting Microsoft software, but has had little success against rivals Apple and Samsung.
Its shares have dropped more than 70 per cent since it unveiled the strategy shift in February 2011 and speculation about a possible takeover bid for Nokia has been rife.
Nokia shares were 1.3 per cent lower at €1.925 by 1253 GMT (2035 Malaysian time), valuing the firm at €7.21 billion (RM28.8 billion).
“Frankly, I’m quite surprised that people actually bought into the possibility (of a takeover),” said a banker based in Hong Kong, who declined to be identified because he was not authorised to speak to media.
“It (Lenovo) would have been spending so much money buying something that is not really Lenovo’s core line of business. I would think a more likely possibility would be some form of collaboration or cooperation between the two,” the banker said.
Lenovo has a market capitalisation of US$7.1 billion and it has cash and cash equivalents of US$3.8 billion.
“Nokia is pretty close to the bottom ... Therefore the optimal window for any acquisition is closing,” said Canalys analyst Pete Cunningham, adding he thought it was highly unlikely someone would buy Nokia.
Last month Nokia reported a steep loss for the April-June quarter, but it did not burn through its cash as quickly as analysts had feared, sparking some hopes that the worst might be soon over.
Nokia declined to comment today. — Reuters
