Despite public arguments among Psion plc’s shareholders, the company voted to sell its stake in operating system vendor Symbian for about $252 million. Psion argued the deal would generate the greatest return for its investments in Symbian, which totaled about $52 million.
“I am proud of what Symbian has achieved and I am proud of our endeavor and stewardship of the Psion role in building Symbian,” said David Potter, Psion’s chairman. “Once the market understands the operating businesses of Psion Teklogix, we believe that the value will come to be recognized and a proper value will be accorded to the company.”
A firm owning about 13 percent of Psion had argued against the sale of the company’s stake in Symbian. Phoenix Asset Management argued that Psion’s investors would be better served by sticking with Symbian until it could file an initial public offering. However, Psion’s Potter said a Symbian IPO was unlikely to happen in the near future, and that its owners-which include Nokia Corp., L.M. Ericsson, Sony Ericsson Mobile Communications L.P. and others-were against an IPO. Symbian operates in the red, and is expected to continue to report losses for the foreseeable future.
Interestingly, Opera Software recently held a relatively successful IPO in Norway. The company sells Internet browsers for mobile phones, including phones running the Symbian operating system.
Two-thirds of Psion’s investors voted to sell the company’s 31.1-percent stake in Symbian to Nokia. Psion’s stock was down slightly after the vote. If the deal goes through, Nokia is set to increase its stake in Symbian from 32.2 percent to 63.3 percent. However, there are several potential outcomes to the sale.
The deal still needs the approval of several European regulators, although the Finnish regulatory agency has already authorized the deal. If regulatory approval is granted, which is expected in four to six weeks, then the rest of Symbian’s shareholders will be given an opportunity to exercise their pre-emptive rights. Each shareholder can up its stake in Symbian according to the size of its ownership-thus, Ericsson could increase its stake in Symbian from 17.5 percent to 25.4 percent. Panasonic, Samsung Electronics Co. Ltd., Siemens AG and Sony Ericsson-the rest of Symbian’s owners-could do likewise. If all of Symbian’s stakeholders exercise their pre-emption rights, Nokia only would be able to increase its Symbian stake to 46.7 percent instead of 63.3 percent.
Nokia has publicly urged the rest of Symbian’s stakeholders to exercise their pre-emption rights and up their stakes, although none have committed to doing so. Nokia has said that it wants Symbian to remain an independent company. And even if Nokia scores a full 63.3 percent of Symbian, the company will remain independent because control over the company requires agreement among 70 percent of its owners.
