Media reports have circulated that Nokia is working with an investment firm to ward off a hostile takeover attempt by private equity, but the Finnish vendor is keeping quiet on the claims. “Nokia does not comment on rumors,” a company spokesperson said in an emailed response to FierceWireless.
Reuters and other media outlets picked up on the news Thursday, based on a report from online investment news portal TMT Finance, which said Nokia has tapped Citi to defend itself against the reported takeover bid for parts or all of its business.
The report pegged the deal value at around $17 billion and potential suitors could include Blackstone, Apollo and KKR, according to SeekingAlpha.
This comes not long after Bloomberg in late February reported that Nokia was working with advisors to explore strategic options, including potential asset sales or a merger deal.
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At a press conference in early March, Nokia Board Chair Risto Siilasmaa said those rumors weren’t true.
“We are not evaluating such strategic options at the moment,” Siilasmaa said at the time. “The new CEO will do his normal review and then may propose changes to the board. But at the moment we have no such actions on the way.”
His comments referenced Nokia’s new incoming CEO Pekka Lundmark, who is replacing longtime chief executive Rajeev Suri effective September 1.
The latest reports of a hostile takeover sent Nokia shares surging on Thursday, and were up nearly 4% Friday morning, according to MarketWatch. In 2019 the Finnish vendor’s stock plummeted, but has been on an uptrend, now up roughly 43% in the past month from mid-March to mid-April.
Nokia competes against rivals Ericsson and Huawei, but the company faced challenges with early 5G deployments in 2019. Last year Nokia acknowledged it needed to pivot on its 5G chip strategy, saying 5G profit margins were dampened by the high cost of its ReefShark chipset.
RELATED: Nokia made a bad call for 5G chips, scrambles to rectify situation
Speaking on the company’s fourth-quarter earnings call, Suri reiterated that Nokia still faced challenges with high radio product costs in the early stages of 5G and that it would take time to see impacts of efforts to fix the situation reflected in financial results. He added that the company had started to roll out its new 5G System on a Chip powered by the ReefShark base station portfolio in order to address its 5G product cost issues and meet higher performance requirements.
At the time Nokia expected the products to account for more than 35% of its 5G product shipments by the end of 2020.