Psion shares plummet after Symbian sale

Shares in Psion collapsed 32 per cent yesterday after the technology company unveiled plans to cash in its stake in the Symbian mobile phone venture that it founded six years ago.

The company is selling its 31.1 per cent share of Symbian to the Finnish mobile phone maker Nokia for an initial £93.5m. Nokia is currently the largest shareholder with a 32.2 per cent stake. Nokia is also Symbian's largest customer, accounting for 70 to 80 per cent of revenues. The move will effectively hand it control of Symbian, which was set up to create an industry standard technology to power mobile phones and whose biggest rival is Microsoft.

Psion will receive another two payments for its stake - one in March next year and one in March 2006 - estimated at £42.2m in total although the precise amount will depend on how many Symbian-powered gadgets are sold.

Taking those estimates into account, the deal values Symbian at £436.2m - well above the £300m valuation it had when Motorola sold its 19 per cent stake last Summer but far beneath some analysts' forecasts of closer to £1bn.

The sale was interpreted as a big negative for Psion, whose share price has recently been driven mainly by speculation of the worth of its Symbian stake. Many analysts thought Psion, which had long hoped to unlock value by floating Symbian on the stock market, had got a poor price. Shares in Psion closed down 30.75p at 65p.

Analysts at Merrill Lynch had valued Psion's stake in Symbian at £240m. "We believe that the announced deal is a significant negative for Psion, given that its Symbian stake was the key valuation driver for the stock. Moreover, we believe that the proposed price paid by Nokia is significantly below the potential value Psion may have been able to crystallise in the event of Symbian's potential IPO," they said.

Psion hinted yesterday that it had come to the view that a flotation of Symbian in the near term now looked unlikely, partly because of Nokia's dominant position within the venture. The remaining shareholders in the venture include Ericsson, Panasonic, Samsung, Siemens and Sony Ericsson although it is unclear whether they too will now sell out.

David Potter, Psion's chairman and founder, stressed that Psion would still benefit over the next two years if the company beat sales forecasts or was floated. "It [Symbian] is a child of Psion," he said. "But we're not there for sentiment, we're there to serve the market and to serve our shareholders."

Psion, which has invested about £29m in Symbian, will now focus on its Teklogix business where it sells technology systems to industrial corporates whose workers use the gadgets to input data.

The planned stake sale also strengthens Psion's balance sheet dramatically, giving it extra firepower to make acquisitions and strategic investments - something that new chief executive Alistair Crawford is keen to do.

Mr Crawford said yesterday that if suitable targets had not been found in two years' time, the company would look at returning some of the cash to shareholders. Nor will Psion have to account for Symbian's losses, which totalled £9.4m in 2002, any longer.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific