Psion Shareholders, vote against the sale of Symbian to Nokia

FT.com
Psion faces opposition over Symbian
Thursday March 4, 3:40 pm ET
By Chris Nuttall, IT Correspondent

Psion's biggest shareholder on Thursday announced its opposition to the mobile computing company's �135.7m sale of its stake in the Symbian joint venture and urged other shareholders to vote down the proposal next week.

Phoenix Asset Management Partners, which holds 56m shares representing a 13.1 per cent stake, said the conditions for an IPO of Symbian had been met and the management of Psion should instead pursue this option aggressively.

Phoenix is the first big investor to come out against the stake sale to handset-maker Nokia, although a number of private investors have suggested a shareholder revolt on online messageboards.

David Potter, Psion's chairman, has the second- largest shareholding with 12 per cent of the company, and is strongly in favour of the deal.

UBS Global Asset Management, Invesco Asset Management and Legal & General Investment then hold 5.8, 4.5 and 3.1 per cent respectively.

Chris Broadhurst, a partner at Phoenix, said on Thursday that the fund management company had been able to study the Symbian shareholder agreement drawn up in 1998, which suggested that a flotation of the company should take place in June 2004.

"Having seen the shareholders' agreement, we take a lot of comfort in the fact that it sees the IPO as the correct route to realise the value of Symbian," he told the FT. "For us, it seems very early to be realising value through a trade sale when we are seeing a clear pick-up for Symbian-licensed phones."

The number of phones shipped last year with the Symbian operating system leapt from 2m in 2002 to 6.7m, with 1m shipped in December as its adoption as the dominant system for the new breed of smartphones accelerated.

In a statement responding to Phoenix, Psion said the agreement of all Symbian shareholders was needed for an IPO and there was a growing divergence of interests between those shareholders who are customers of Symbian - which would include Nokia - and those who were not.

"This could have an adverse effect on the value that might be achieved in the future," it warned.

A person close to the situation said Psion had been talking to most of the share-holding institutions and was "comfortable" that the resolution to sell the Symbian stake would be approved at an extraordinary meeting next Friday.

The circular to shareholder indicates that Psion will receivean initiail payment equivalent to 22.5p per Psion share, followed by two contingent payments in March 2005 and March 2006. Based on analyst mean consensus estimates of 18.7 million unit sales in 2004 and 31.5 million unit sales in 2005 respectively these payments would amount to the equivalent of 32.7 pence per Psion share.

The total thus expected is 55.2p per Psion share. With Psion trading at around 60p, the downside seems limited.

If at any time prior to 31 December 2005, an IPO of Symbian takes place, and if the IPO price per share (calculated as the 30 day average volume weighted trading price immediately following the IPO) is greater the price per share paybale by Nokia, the price payable shall be increased to the IPO price.

Having been a Psion shareholder for 3 years i have followed the fortunes of the company from its withdrawl from the mobile market to the sale of its software division. I cannot believe that the board of Psion would come this far and just when Symbian is self sustaining, delivering good volume with a number of new devices they are getting out now. I believe David Potter when he says that there are divisions within Symbain about the way forward for the company, however i also belive that �135 million is vastly under valued for Psions stake.

My view is that Psion clearly want an IPO and Nokia clearly want to gain control. With proposing a deal that undervalues Symbian and upsets its own shareholders Psion has done two things. Firstly it has focused the mobile industry on the undesirable effect of Nokia gaining control of what should be an independant industry standard, and secondly guarantees that the shareholders of Psion will reject the deal. I think that with Symbain reaching profitability, now is the time to make the company truely independant by offering it to the public. This would ensure an independant, highly stable, standard operating system that could grow to become the industry standard whilst realising the needs of the mobile phone investors to get a good return on their investment.

I believe that Psion shareholders will reject this deal as the board secretly hope, thus forcing the hand of the other shareholders to go for an IPO to ensure the future success of their own industry. Only time will tell and i look forward with great anticipation to the 12th March for a NO vote to the sell out by Psion and the start of a process to ensure the success of the symbain platform years to come.

Hi there
I have been a Psion shareholder for several years, and have held on despite the various problems because I believed that the Symbian operating system was excellent and would eventually come to fruition. I have friends who have worked with it and have been very positive about it's potential. Do you think that Nokia want to buy it in order to squash it out of site, or do you think they will develop it?

Also does anybody know how I could express my disatisfaction with the proposed sale directly to the 'shareholder revolt' people. Unfortunately I don't get a vote 'cos my shares are held in an ISA.

Interested....

Roluck

Originally posted by Roluck
Also does anybody know how I could express my disatisfaction with the proposed sale directly to the 'shareholder revolt' people. Unfortunately I don't get a vote 'cos my shares are held in an ISA.

Roluck

This site has been set up for shareholders dissatisfied by the Psion deal.

I bought Psion shares before Christmas when I got my Nokia 6600. I could see that this was a good operating system. I did some hard maths and worked out that if 100 million phones a year are being sold (this is in line with conservative industry estimates for 2008), then at $6 per phone in royalties, Psions share would be $200 million a year in pure profit.

By 2008, that $200 million of cash flow might be worth $3 billion, which discounted back at 15% p.a. values the stake at $1.7 billion today.

With that sort of value, �135 million for the stake seems to be a bit of a give-away.

I will be voting AGAINST the sale of the Symbian stake.

Right on Brother!

Wirelessly posted (Nokia6600/1.0 (3.42.1) SymbianOS/7.0s Series60/2.0 Profile/MIDP-2.0 Configuration/CLDC-1.0)

The gsm industry, considered as mature and growth is now facing a real explosion and true revolution in terms of devices, applications and market demands. If the interest of phone manufacturers is so big 4 symbian it looks like nokia wants control on this market. I just keep comparing nokia with microsoft and i think that having users with same software makes just a little windoze on each gsm handset. Don't let this thing happen. Me.