Waterloo, ON – Research In Motion Limited (”RIM”) (Nasdaq: RIMM; TSX: RIM) disclosed today that it has effectively been prevented from submitting an offer for the Nortel Networks Wireless Business that is the subject of a bankruptcy auction scheduled to occur on July 24, 2009. The assets being sold are Nortel’s CDMA and Long Term Evolution Access businesses. In its CDMA and Long Term Evolution Access businesses, Nortel develops current and next generation technology for wireless infrastructure and mobile devices.
RIM sought to be qualified as a qualified bidder in Nortel’s auction bidding process for the Wireless Business, but RIM was told it could be qualified only if it promised not to submit offers for other Nortel assets for a period of one year. In seeking to impose this condition, Nortel and its advisors were fully aware of RIM’s desire to purchase other Nortel assets as part of a solution to retain key portions of Nortel’s business under Canadian ownership. Despite repeated efforts, Nortel, its advisors and its court-appointed monitor have rejected RIM’s repeated attempts to engage in meaningful discussions. Based on its preliminary review, RIM would be prepared to pay in the range of US $1.1 billion, subject to due diligence and the entering into of appropriate ancillary agreements, for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets. RIM believes that such an offer would result in an extremely attractive price for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks.
Jim Balsillie, RIM’s co-chief executive officer stated, “RIM is extremely disappointed that Nortel’s world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada and that Canada’s own Export Development Corporation is preparing to help by lending $300 million to another bidder. RIM remains extremely interested in acquiring Nortel assets through a Canadian ownership solution that would serve the dual purpose of keeping key wireless technologies in Canada and extending RIM’s leadership in the research, development and distribution of leading edge wireless solutions, but RIM has found itself blocked at every turn.”
RIM believes that the loss of Canadian ownership of Nortel’s CDMA and Long Term Evolution Access businesses may significantly, adversely affect national interests, with potential national security implications, and that the Government of Canada should review the situation closely.