Report: Nokia Siemens' private equity talks fail to make headway

Nokia Siemens Networks has so far failed to make tangible progress in its discussions with private equity firms about selling a stake in the company, according to a Reuters report.

The report, citing three unnamed sources, said the talks Nokia Siemens started in August with four or five private equity firms are still at an "exploratory" stage. Additionally, the report said, both Nokia and Siemens differ on what the price of a stake should be.

"Normally when deals are in that phase for a couple of months, it means it is not particularly exciting," one source told Reuters. The Financial Times has reported that Blackstone, Bain, TPG Capital and Silver Lake are among the interested parties.

Nokia Siemens spokesman Ben Roome said the company has no comment on the report, other than to reiterate that "a handful of private equity firms did approach us, expressing unsolicited interest in the company." A Nokia spokeswoman declined to comment.

Interestingly, Siemens CFO Joe Kaeser told reporters in Munich Thursday that Nokia Siemens is actively engaged with two of the four private equity firms that had expressed interest, but that the equipment vendor wants a partner that has experience in the wireless industry and not just deep pockets.

"If the shareholder structure will indeed change before 2013, it depends on the industrial logic, on what interested parties have to offer," Kaeser said, according to Bloomberg. "It's not so much a question of money, but a question of how to strengthen the asset going forward."

Nokia Siemens has weighed down the balance sheets of both parent companies. The joint venture reported a $386 million operating loss in the third quarter. Sales were up 7 percent though, and Nokia said it expected NSN's operating margin to be between 2 and 5 percent in the fourth quarter. Despite the operating loss, the company is still in a relatively strong position among global vendors, and is looking to gain ground in North America through its $1.2 billion acquisition of Motorola's (NYSE:MOT) wireless networks business. 

For more:
- see this Reuters article

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