The last 24 hours have been abysmal for Research in Motion as its shares lost nearly 10 per cent in one day almost matching its 52-week low of $12.45; that's a fall of more than 75 per cent in less than one year.
At the time of writing, the price of one RIM share in after hours trading is $12.92, valuing the company at around $6.8 billion and according to Bloomberg, the only communications-equipment maker with a market valuation bigger than $5 billion that sells at less than book value (Total assets value stands at $13.731bn).
Even with a 41 per cent premium, RIM would still be a very attractive buy at just under $10 billion (a 41 per cent premium suggested by Ironfire Capital LLC). But out of all potential suitors, one stands out amongst others cited; Cisco.
The networking giant has deep pockets with total assets of more than $87 billion; this war chest allowed it to buy nearly 150 companies over the last 20 years with four of them valued at more than $5 billion.
There are clear synergies between RIM and Cisco; both are based in North America, their main focus is in the business/enterprise markets, both are telecommunication players and both are still market leaders in their respective segments plus they have worked/are working together (UC Manager, Flip-on-BlackBerry. Telepresence).
RIM would bring some gems onboard like QNX (which Cisco uses in its IOS-XR OS), Blackberry Enterprise Server middleware and the Blackberry product range (tablet, smartphones). Plus the company is now committed to the business/enterprise segment again.
Getting RIM would allow Cisco to diversify its product portfolio while staying close to its core. It would also enable it to push the Unified Communications mantra further than anyone else on the market by delivering compelling data-centric solutions (VoIP, IM) amongst a massive user base (75 million customers and counting).
Another interesting titbit is that because RIM is a Canadian company, Cisco wouldn't need to bring its cash onshore should it go ahead with the acquisition and the Canadian government confirmed that it would not be averse to a foreign company acquiring RIM (ed : although we're not sure how they'd feel should Huawei come forward as a suitor).
Would you be pushing for such a shotgun wedding right now - as one analyst put it? Would Cisco be the right partner for RIM? What are your thoughts?