Let’s be crystal clear: there is zero reason to think Microsoft is actually going to make an offer to buy Research In Motion,Canada goose no matter what the price.
Nomura software analyst Rick Sherlund weighed on the speculation about a RIMM/MSFT combination in a research note today,Canada goose jakke and laid out a pretty clear case on why the combination isn’t going to happen.
And by the way: Sherlund doesn’t think there is much chance that Microsoft would make an outright bid for Yahoo, either,Canadian jakke though taking a minority stake is not out of the question.
“On RIMM, running a simple merger model suggests it would be accretive to near-term earnings for Microsoft to buy RIMM even at 50% premium, but Microsoft is unlikely to do a financial deal and absorb the integration challenges and longer-term platform and customer support obligations unless it were a compelling strategic fit,Goose jakke which we do not see,” he writes in a research note. “Microsoft has its own operating system strategy with Windows Phone 8 due out next year, which it has been collaborating on with Nokia. This operating system is not compatible with that of RIMM, and to alter course for either company at this juncture would likely be imprudent.”
“Microsoft has the benefit of scale in search through their current relationship with Yahoo and see no need to acquire the company,” he writes. “It is possible that Microsoft may be part of a larger group to invest in a minority position in Yahoo for some strategic business relationship, but this is very different than Microsoft buying Yahoo, that ship sailed by a few years ago and is unlikely, in our view, to be revisited given that Microsoft now has the scale they desired in search through their existing relationship with Yahoo. There are other parts of Yahoo that are likely of strategic interest to Microsoft, but there are likely smarter ways to work together than buying the company.”
Both RIMM and YHOO have been trading higher Thursday on various kinds of M&A speculation. (Something seems likely to happen soon in Yahoo’s case, but I would bet against any kind of a deal in the near term that involves RIMM.)