Shares in Finnish mobile phone maker Nokia, which is struggling to recover lost market share, climbed six percent - the most in five months - driven by speculation of takeover interest from Microsoft Corp. or South Korean rival Samsung Electronics. The sharp increase made Nokia the biggest gainer in the FTSEurofirst 300 .FTEU3 index, after a 40 percent decline in shares over the last three months. The stock gained six percent to close at €2.36 in Helsinki.
Nokia had dropped as much as 41 percent this year, as consumers shifted to Apple's iPhones and other smartphones running on Google's Android software. The Finnish company is now rebuilding its smartphone business around Microsoft's Windows Phone software. According to Exane BNP Paribas, Microsoft has been speculated as a potential acquirer.
Potential Bidders
"A lot of names have been mentioned as potential bidders," said Canaccord Genuity analyst Bo Nordberg, as cited by SFGate. "I am sure someone is looking at it, but it is not particularly compelling. Even among the analyst community the feeling is quite skeptical about the outlook for the company."
Analysts also considered the chances of a bid from South Korean giant Samsung Electronics to take over Nokia, which has been losing significant market share. "Samsung is flying at the moment and it is hard to see what it would gain from buying Nokia," said Ovum analyst Nick Dillon, as cited by Reuters. "Any benefit it would gain from Nokia's patent portfolio or manufacturing facilities would likely be outweighed by the complexities of integrating the two companies." Ben Wood, head of research at CCs Insight, shares the same reluctance. "This is Friday madness. I can't think of a rational reason why Samsung would want to buy Nokia at present."
Nokia spokesman Doug Dawson declined to comment on the share-price rise or any speculation regarding mergers and acquisitions. Neither Microsoft nor Samsung representatives offered any comment on the rumored bids, saying they do not comment on rumors and speculation.
Context
Apple took the lead in smartphone innovation in 2007, when it introduced its first iPhone. Nokia has lost more than €70 billion ($87 billion) in market value since then, and for the first time ever, Samsung Electronics dethroned Nokia in the first quarter as the world's largest mobile maker.
"With the stock trading just above 2 euros, it's obvious that there is more value than that in the assets and it's not difficult to understand how rumors like this made the stock jump," saod Haakan Wranne, an analyst at Stockholm firm Swedbank Markets, as cited by SFGate.
