Lift for CSR as Samsung picks up handsets arm
Wednesday 18 July 2012
The wireless technology provider CSR's shares soared 34 per cent yesterday after Samsung bought its troubled handsets business for £200m and spent another £22m on a 5 per cent stake in the British firm.
CSR said the sale would allow it to focus on faster-growing, more profitable areas such as Bluetooth wireless technology and digital "infotainment" systems in cars.
Analysts welcomed CSR's move, with the broker Liberum Capital describing the handset division as "structurally challenged" and a "drag" on the parent company.
CSR shares have slumped by more than half since 2007 as it struggled to keep up with nimbler rivals.
Even after yesterday's rise, the shares have only returned to levels seen a year ago.
However, Samsung was keen to acquire CSR's mobile technology as the South Korean electronics giant invests in its Galaxy range, the biggest rival to Apple in the smartphone and tablet market.
Samsung has bought a 5 per cent stake in CSR because the two companies "believe that there are significant opportunities for future collaboration in connectivity and location technology".
Cambridge-based CSR will return most of the £200m to shareholders. Schroders, which holds a 19 per cent stake, will be the main institutional beneficiary.
The board director with the biggest shareholding is chief marketing officer Kanwar Chadha whose holding totals almost 900,000 shares.
CSR said that about 310 staff in the handset division will move to Samsung and should have "strong future prospects". There was no word of any job cuts.
JPMorgan Cazenove is acting for CSR while Evercore Partners is advising Samsung.
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