TORONTO, Sept. 6, 2011 /CNW/ - Jaguar Financial Corporation ("Jaguar") (TSX: JFC), a shareholder of Research In Motion Limited ("RIM" or the
"Company"), on behalf of itself and other supportive shareholders,
today called upon the Directors of RIM to establish and carry out a
formal process for the maximization of shareholder value. This value
maximization process would include the pursuit of all options including
a potential sale of the Company or a monetization of the RIM patent
portfolio by a spin-out to RIM shareholders.
Vic Alboini, Chairman and CEO of Jaguar, stated: "The status quo is not
acceptable, the Company cannot sit still. It is time for
transformational change. The Directors need to seize the reins to
maximize shareholder value before more market value is lost."
Jaguar strongly recommends that RIM's Directors appoint a Special
Committee of the Board consisting of four or five of the current seven
independent directors to pursue a shareholder value maximization
Jaguar believes a transformational change to maximize shareholder value
is necessary for the following reasons:
Poor Share Price Performance
There has been a precipitous decline in the Company's share price since
2008, from $149.90 in June 2008 to $29.59 on September 2, 2011,
representing a decline of approximately 80.3%. In contrast, over the
same timeframe, the TSX Composite Index has only fallen by
approximately 14.8%. RIM's chronic underperformance and repeated delays
in executing its strategy have led Jaguar to the conclusion that
fundamental change at RIM is required. Most importantly, RIM's
competitors have seen a significant increase in market share at RIM's
expense, both in the enterprise and consumer markets, and a
corresponding increase in share price and overall valuation.
Lack of Innovation Resulting in a Loss of Market Share
While its rivals have demonstrated an ability to develop and market
products with features that inspire consumer enthusiasm and drive
higher adoption rates, RIM has clearly fallen short. Its failure to
offer products with innovative features, combined with its limited
selection of applications, has resulted in RIM losing market share to
its competitors. While few would question the email and security
capabilities of RIM's BlackBerry platform, the reality is that RIM has
failed to develop the multi-purpose device that meets the requirements
of today's dynamic consumer landscape.
The BlackBerry, once a market leader, has been relegated to number 3 in
terms of market share behind Apple's iPhone and Google's Android
phones. A recent comScore report estimated that RIM's U.S. smartphone
market share declined from 39% to 22% over the twelve month period
ended July 31, 2011. This decline in the Company's standing can largely
be attributed to significant execution delays, inadequate mobile
applications, and the lack of a competitive product that addresses the
needs of the consumer marketplace.
With a reduced market share for RIM there is the serious risk that
developers of mobile applications will prioritize developing
applications for RIM's competitors. There should be a concerted focus
for RIM to encourage or finance the development of cutting edge mobile
applications. This lack of an effective ecosystem is a key shortcoming
that needs to be addressed.
Jaguar has noted the recent resignations of several key RIM employees.
The disruption to the Company resulting from these departures could not
have come at a more inopportune time. The ongoing exodus of RIM's human
capital raises questions about RIM's ability to inspire and retain the
talent that will be essential for RIM to regain its competitive
Corporate Governance Concerns
Jaguar believes RIM's current corporate structure, which includes Mr.
James Balsillie and Mr. Mike Lazaridis as Co-Chief Executive Officers
and Co-Chairmen of the Company, is ineffective and requires meaningful
change. "Messrs. Balsillie and Lazaridis are first class entrepreneurs,
but the current management arrangement with the Board impedes the
Board's effectiveness, in turn impacting RIM's strategy, operations and
performance", stated Mr. Alboini.
At RIM's most recent Annual General Meeting of shareholders, Northwest &
Ethical Investments L.P. ("Northwest"), an institutional shareholder,
proposed that the role of Chief Executive Officer and Chairman be
divided and that RIM have an independent Chairman. However, Northwest
withdrew its proposal after reaching a compromise with RIM that Jaguar
believes is woefully inadequate.
RIM's June 30, 2011 press release detailing the compromise outlined the
formation of a Committee of independent directors to "study" the
issues, "determine the business necessity" for Messrs. Balsillie and
Lazaridis as Co-CEOs to have Board titles, "propose and provide a
rationale for a recommended governance structure for RIM" and to report
by January 31, 2012. Jaguar believes that this compromise clearly
demonstrates the complacency that has led to the Company's downfall, as
well as the disconnect between the Board and its shareholder base.
"These issues can easily be determined in seven hours rather than seven
months, and the solutions are obvious: one CEO and an independent
Chairman" stated Mr. Alboini.
Recent Consolidation in the Mobile and Patent Spaces
Merger and acquisition activity has been prevalent in the technology
industry recently, particularly regarding intellectual property, as
highlighted by Google Inc.'s $12.5 billion proposed acquisition of
Motorola Mobility Holdings, Inc.; Wi-LAN Inc.'s $480 million offer to
acquire MOSAID Technologies Incorporated and the recent $4.5 billion
acquisition of Nortel's patents by a consortium of six companies
On July 19, 2011 InterDigital, Inc. put itself up for sale, and the
driving reason, as astutely articulated by the Chairman of
InterDigital, was the recognition by major players in the mobile
industry that the value of patent portfolios has increased
substantially. The share price of InterDigital increased from $41.51
the day before the announcement of the value maximization strategy to
the current price of $68.39.
In addition, Eastman Kodak Company announced on July 20, 2011 a value
maximization strategy related to its digital imaging patent portfolios,
a move it described as "reflecting the current heightened market demand
for intellectual property." Kodak stated "we believe the time is right
to explore smart, opportunistic alternatives for our digital imaging
patent portfolios." Kodak shares increased from $2.31, the day before
the announcement, to the current price level of $3.24.
Finally, the announcement on September 1, 2011 of MOSAID's acquisition
of 2,000 wireless patents and patent applications originally filed by
Nokia further demonstrates the technology industry's intensified
interest in intellectual property.
With its own stock of coveted patents, RIM is positioned to benefit from
the increased appetite for intellectual property, but the Board must
change course and recognize the opportunity. RIM's Directors must seize
the reins, take note of recent merger and acquisition developments, and
pursue a strategy that maximizes RIM's value.
Without the commencement of a formal value maximization process, there
is the potential for a serious loss of shareholder value. Jaguar
believes now is the time to commence a formal value creation process.
Any RIM shareholders who wish to support Jaguar in its efforts to
encourage the RIM Board to begin a value maximization process can
contact Jaguar at 416-363-1124 or by e-mail firstname.lastname@example.org.
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
Kyler Wells, General Counsel & Corporate Secretary