Research In Motion Ltd. (RIM) is near a decision to pick a financial adviser, and JPMorgan Chase & Co. (JPM:US) is the leading candidate to help the company weigh strategy options, two people with knowledge of the matter said.
A final choice hasn’t been made and could come within days, said one of the people, who declined to be identified because the matter is private. RIM is considering options such as a licensing deal or a strategic investment, a person with knowledge of the matter said this week.
Chief Executive Officer Thorsten Heins, who took over from company co-founders Mike Lazaridis and Jim Balsillie in January, said he’s considering strategy changes after customer and market-share losses led to five straight quarters of sales shortfalls for Waterloo, Ontario-based RIM.
“This clearly indicates that opinion in Waterloo is changing much faster than people anticipated,” said Anil Doradla, an analyst at William Blair & Co. in Chicago. “It’s a far cry from what they stated six months ago.”
Heins has taken a far more candid approach to recognizing RIM’s shortcomings and communicating them within and outside the company than his predecessors, said Doradla, who rates its shares the equivalent of hold.
‘Recognizing the Realities’
“He’s recognizing the realities and saying, ‘You know what, let’s be realistic’ -- and credit to him,” Doradla said.
RIM also discussed its options with Bank of America (BAC:US) Corp., according to a person with direct knowledge of the situation.
Tenille Kennedy, a RIM spokeswoman, declined to comment, citing a policy not to discuss rumor or speculation. Jennifer Zuccarelli, a spokeswoman for New York-based JPMorgan, also declined to comment, as did John Yiannacopoulos, a Bank of America spokesman.
RIM climbed 2 percent to $13.47 at the close in New York. The stock (RIMM:US) has dropped 75 percent in the past 12 months.
The company would prefer to license its BlackBerry mobile operating system, a person with knowledge of the matter said this week. RIM is racing to put the final touches on a new platform, known as BB10, and release the first smartphone built on the software later this year.
After a licensing deal, RIM’s next choice would be to find a strategic investor, the person said this week. RIM doesn’t plan to sell itself, according to the person.
Doradla, the William Blair analyst, said RIM doesn’t need a banker to negotiate a licensing relationship.
“The way I interpret hiring a banker is to sell parts of business, an outright sale or an equity stake by a third party,” he said.
Heins, who joined RIM in 2007, said in March that while the company would consider a sale, that wasn’t “the main direction” he’s pursuing.
Sameet Kanade, an analyst at Northern Securities in Toronto, said that means RIM is considering even narrower options.
“I have never seen a banker be hired for licensing negotiations,” said Kanade, who has a sell rating on RIM. “There is only one reason you hire a banker and that’s to put it up for sale or sell parts of the company.”
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