Shares in Psion fell 30 per cent in early morning trading today on news that the British company had sold its 31.7 per cent stake in Symbian to Nokia for up to £135.5m.
Nokia is paying £93.5m in cash plus royalty payments for 2004 and 2005. Psion will get 84p for each Symbian OS license sale, which should divvy up to payments of £18m in 2004 and £31m in 2005. Nokia in turn will end up with 63.3 per cent of Symbian's stock compared to today's 32.2 per cent.
Psion, the inventor of the Symbian OS upon which most of today's smartphones are based, was seen by investors as a cheap way into Symbian. However, the sum realised was significantly less than City expectations. In December 2003, Merrill Lynch valued Psion's stake in Symbian at £240m.
David Potter, Psion founder and chairman, said today that the company's interest in Symbian had always been financial. He noted that the company had invested £35m in Symbian so today's transaction represented a huge rate of return.
Alistair Crawford, Psion CEO, said it was time for the company to "realise our investment. We think it is a great deal, and we get a very good price. We’re very confident about the future of Symbian and therefore we’re happy to have two years of contingent payments so that we can benefit from the future success of Symbian."
Psion was always the minnow among sharks: the company found it challenging to fund its alloted portion of funding for Symbian, unlike the top tier phone makers which comprised the rest of the share register.
Now it too can be a shark: Psion is to re-invest the Nokia money in its Psion Teklogix industrial handhelds arm, its sole remaining operating business following last week's disposal of Psion Software for an undisclosed sum. Plans could include acquisitions in related vertical handheld markets, Crawford said. ®
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