JAGUAR CALLS FOR A SALE OF RIM IN WHOLE OR IN SEPARATE PARTS
TORONTO, Dec. 15, 2011 /CNW/ - Jaguar Financial Corporation ("Jaguar") (TSX: JFC), a shareholder of Research In Motion Limited ("RIM" or the "Company"), today repeats its calls for substantial corporate governance change
and for a sale of RIM, whether as a whole or as separate parts.
Gar Emerson's Article on RIM's Corporate Governance
Jaguar again calls for the separation of the Chairman and CEO roles at
RIM and points out that a process to carry out this separation was in
place in 2007 and was never completed.
Jaguar refers to an article published by H. Garfield Emerson, a
well-known governance advisor who currently sits on the Boards of
Canadian Tire Corp. Ltd. and CAE Inc. The article, which can be found
at www.governancecanada.com, notes the following from a report dated March 5, 2007 by a Special
Committee of the RIM Board:
"Consistent with current best practices in corporate governance, the
roles of Chairman and CEO are being separated. Mr. Balsillie has
voluntarily stepped down from the role of Chairman to allow future
consideration of a non-executive Chairman by the Nominating Committee."
On May 17, 2007 RIM made an announcement concerning a restatement of its
financial statements which, as pointed out by Mr. Emerson, included
disclosure by RIM that "the roles of Chairman and CEO have been
separated." Further RIM announced that Mr. Jim Balsillie was resigning
as Chairman "to allow future consideration of a non-executive Chairman
by the Nominating Committee."
Contrary to these statements, over four years later, the roles of
Chairman and CEO have yet to be separated.
The historical governance review by Mr. Emerson serves to underscore
Jaguar's call for the RIM Board to complete its plan to separate the
roles of Chairman and CEO which RIM's own Special Committee approved as
a best practice in corporate governance.
Call for Barbara Stymiest and Roger Martin to Step Up
Jaguar calls upon Barbara Stymiest to draw upon her experience and cause
significant change in corporate governance. Ms. Stymiest was former
Chief Operating Officer and also former Group Head, Strategy, Treasury
and Corporate Services at the Royal Bank of Canada, and previously
President and CEO of the TSX Group Inc. Both of her former employers
are seriously dedicated to implementing appropriate corporate
governance practices. In fact Ms. Stymiest lists "Corporate
Governance" as an area of expertise in the 2011 RIM Management
Information Circular ("RIM Circular").
Ms. Stymiest joined the RIM Board in 2007 when there was no Chairman and
remains on the Board despite the current lack of an independent
Chairman contrary to the Company's 2007 plan.
Jaguar also calls upon Dean Roger Martin to persuade his co-directors
that significant change is necessary. Mr. Martin is the Dean at the
Rotman School of Management ("Rotman") at the University of Toronto and also joined the RIM Board in 2007
when there was no Chairman. Rotman prides itself as an educational
leader in corporate governance, and Mr. Martin's brief biography on the
Rotman website speaks to his expertise in Thinking, Business Design,
Corporate Social Responsibility, and Country Competitiveness.
Jaguar assumes that both Ms. Stymiest and Mr. Martin, in their roles as
directors, approved the unconvincing rationale for the Co-Chair
appointments set out in the RIM Circular:
The Co-Chair appointments "are intended to provide the Co-Chief
Executive Officers with the title of Co-Chairs for the purpose of
representing the Company's business and operational interest with
customers, suppliers, governments, regulatory authorities and other
strategic parties consistent with the duties and authority of the
office of the Chief Executive Officer."
Later in the RIM Circular the RIM directors state: the Co-Chair
appointments provide the Co-CEOs "with an external facing title to
further the Company's business interests in international markets."
It strains credibility to believe that a CEO requires the title of
Chairman to sell RIM products but the RIM directors have apparently
bought into this unconvincing rationale by approving the RIM Circular.
Jaguar believes that considering the experience Ms. Stymiest and Mr.
Martin bring to RIM's Board of Directors, they should step up and take
the lead in making dramatic governance change or else resign from the
Board if they are unable or unwilling to initiate appropriate
CALL FOR SALE OF RIM IN WHOLE OR IN PARTS
Given its poor operational and financial performance, RIM is trading at
a significant discount to its peer group valuation. Jaguar believes
that the most effective way for RIM to reduce this discount is through
a change in strategic focus which is often preceded by a change in
leadership. Given the unacceptable level of management dominance over
the independent directors, and the lack of engagement by the
independent directors with RIM's shareholders, Jaguar considers it
highly unlikely that the Board will cause a change in leadership or a
change in strategic focus, unless Ms. Stymiest and Mr. Martin push for
Vic Alboini, Chairman and CEO of Jaguar stated: "At this point we
believe investors have lost faith in the ability of the RIM management
team to carry out a proper game plan to restore value. Unless the
independent directors push to replace management or change RIM's
strategic focus, Jaguar believes that the road map to value restoration
lies in a sale of RIM whether as a whole or in separate parts."
Jaguar believes that RIM should sell its handset business and monetize
its patent portfolio, while retaining its service business under new
leadership. Jaguar believes RIM has lost its ability to compete in the
consumer hardware business and a sale or spinout to its shareholders of
the handset business is recommended as an approach to restoring value.
Jaguar believes the service business is RIM's most valuable business
given its recurring revenue and estimated high margins. If the
hardware business were sold, RIM can focus on managing and delivering
mobility solutions in the enterprise sector for all smartphones and
tablets. With its secure messaging platform, Jaguar believes RIM could
create considerable value as a software and service provider.
Jaguar is a Canadian merchant bank which invests in underperforming,
undervalued or unappreciated companies and acts as a catalyst to create
value. Jaguar's track record includes the following gross annualized
gains: Century II Holdings Inc. (134%); HudBay Minerals Inc. (105%);
Kinbauri Gold Corp. (113%); RAND A Technology Corporation (25%); and
Virtek Vision International Inc. (46%).
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this news release. This press release may
contain forward-looking statements with respect to the Company, its
operations, strategy, financial performance and condition. These
statements generally can be identified by use of forward looking words
such as "may", "will", "expect", "estimate", "anticipate", intends",
"believe" or "continue" or the negative thereof or similar variations.
The actual results and performance of the Company discussed herein
could differ materially from those expressed or implied by such
statements. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Important factors that could cause actual results to differ materially
from expectations include, among other things, general economic and
market factors, and competition. The cautionary statements qualify all
forward-looking statements attributable to the Company and persons
acting on their behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release and the
Company has no obligation to update such statements.
SOURCE Jaguar Financial Corporation
For further information:
Vic Alboini, Chairman & Chief Executive Officer
- or -
Kyler Wells, General Counsel & Corporate Secretary