RIM shares spike on takeover talk, Cisco possible

Research in Motion shares have jumped almost eight percent in the past two days over rumors that the BlackBerry creator may be a takeover target. The possible buyer hasn't been named, but Kaufman Bros. analyst Shaw Wu speculated that Cisco would make the most sense were the rumor to be true. RIM's strength in business was considered a good fit and could help Cisco's "'secret' consumer ambitions," he said.

Microsoft and Oracle were also floated as possibilities, though Wu stressed that he didn't have any inside knowledge of whether any deal was happening.

The analyst didn't think a buyout was likely as it would be too difficult a target. Waterloo, Ontario-based RIM is widely considered Canada's most important technology company and could face stiff opposition from a Canadian government worried about losing business. Its market cap, valued at $29.18 billion US as of Wednesday night, also made it expensive for any but the largest companies.

Apple isn't probable. It has $51 billion in cash and has said it's "keeping its powder dry" for strategic acquisitions, but the legacy support needed would likely be unwanted. The iPhone designer would have to maintain existing corporate contracts that form the core of RIM's income and support BlackBerry deals. Most Apple takeovers have involved far smaller companies that have technology or staff that it wants.

Outside of rumors, RIM is estimated to be on track to meet its fall outlook, although it may face an unusually hesitant US audience. Some buyers have been waiting for devices preloaded with BlackBerry 6 before upgrading, such as the Style at Sprint and the Storm 3 at Verizon. Only the Torch ships with the modern OS so far, and carriers have only promised to eventually upgrade some current phones to BlackBerry 6 within the next few months.

By Electronista Staff