In last few days we have been contacted by many Nokia investors who found many aspects of the deal bit fishy. They have a few really genuine looking concerns, one of them is certainly the deal amount paid by Microsoft for full “Devices and Services” division. Compared to some recent deals it is really too cheap.
A regular writer at “Seeking Alpha” and Nokia investor “Abu Hussain” has tipped us with his article in which he has raised many tough questions over the deal and many aspects which really need some explannation.
Just read Abu’s analysis about some recent deals and you will really be compelled to ponder how the Nokia BOD agreed to sell the Nokia D&S divison so cheap?
Regarding Valuation
Why was Motorola worth more than Nokia? (Motorola was sold for $12.5 billion representing a 60% premium on share price. Nokia’s Devices & Services division was sold for $7.2 billion.)
Why was Skype worth more than Nokia to Microsoft? (Skype was bought for $8.5 billion)
Please tell us why Xiaomi is worth more than twice as much as Nokia’s Devices & Services Division? (Xiaomi, a tier-three Chinese manufacturer is valued at $10 billion by its latest venture capital equity boost).
On what grounds would a phone range growing at 27%+ per quarter be sold for less than Xiaomi?
Why did the board not create an open auction in the manner of BlackBerry? Why were negotiations so secretive? How does this maximise shareholder value?
There are many unanswered questions which raise doubt about this deal and the role of Elop the TH (Trojan Horse).
Regarding Negotiations
What guarantee is there that HERE will remain a key component of the WP platform? Microsoft has stated it will only license the platform, but not given any guarantees as to minimum royalty rates.
Nokia has a strong brand name with the “Nokia Lumia” range. Why has the “Nokia” name not been licensed to Microsoft? This would have generated extra revenue for shareholders, especially as Nokia is contractually forbidden from building phones until the end of 2015.
Were any of Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen and Chris Weber involved in the negotiations with Microsoft? Why does this not present a conflict of interest? This is especially pertinent as they will all be joining Microsoft.
Do you think Stephen Elop, former Nokia CEO will be content to be only an Executive Vice President? Is this only being done to keep Elop out of the limelight to ensure the deal is approved?
It is strongly rumored Stephen Elop is likely to become next Microsoft CEO. Does this not present a conflict of interest?
If shareholders have the right to vote on this deal – why was no guidance given that a key asset of Nokia was up for sale?
There are many more similar questions in Abu’s original article. So, click here.
In the meantime, if you want to challenge price of this deal, you can sign in to the below petition sent to us by “Shyam Kumar”.
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