October 20, 2020

DealBook: Momentum Builds for Blackberry Break-Up

Research in Motion's Blackberry.Oliver Lang/dapd, via Associated PressResearch in Motion’s BlackBerry.

The call for Research In Motion to explore a sale of all or part of the company is growing louder.

On Tuesday, the Jaguar Financial Corporation, a Canadian activist investor that is leading a campaign to agitate change at the BlackBerry maker, announced on Tuesday that it has the support of shareholders who represent 8 percent of RIM’s shares. In a statement, the firm advised the company to install a new chief executive and chairman and to explore options that will increase shareholder value, such as a sale of the company, a merger, or a split that would divide RIM into three separate businesses.

“Our game plan is to gain the support of shareholders representing a significant number of RIM shares,” Vic Albioni, chief executive of Jaguar Financial, said in a statement. “Our supportive shareholders approve Jaguar’s plan to negotiate, at this point in time, changes in governance and the pursuit of a value creation transaction.”

Jaguar, a boutique Canadian merchant bank, is far from RIM’s largest shareholder, but it is tapping into a base of investors growing increasingly restive. The stock is hovering at five-year lows. Since the start of this year, shares of RIM have plunged nearly 60 percent. The company has been troubled by production delays and an increasingly competitive environment, as more consumers buy mobile devices powered by rivals Apple and Google.

In September, Jaguar reached out to RIM in a tersely worded letter. The firm blasted the company for its corporate governance structure (which includes two chief executives that serve as co-chairmen) and a lack of innovation.

On Tuesday, Jaguar stepped up its rhetoric. Calling for a dismissal of RIM’s chief executives, Jaguar said the company has lacked focus because of its current governance structure. “The lack of board oversight and absence of an independent chairman allowed one of the two Co-C.E.O.’s to chase his dream of buying an NHL hockey team during the same period,” the company said in its statement. The appointment of a new chief executive, Jaguar continued, will “address the historical lack of attention and oversight at the board level, and the need for a laser beam focus by management on RIM’s business rather than distractions such as a professional hockey team.

Jaguar also called on RIM’s board to follow the lead of several technology giants, which have recently pursued dramatic changes. For instance, the firm noted, in the last two months, Yahoo has ejected its chief Carol Bartz, Hewlett-Packard has dropped Leo Apotheker, and Google bought Motorola Mobility after it was spun out of Motorola.

“The path to negotiated change is precise and clear; it is not paved with uncertainty. It is time for meaningful and obvious change,” Mr. Albioni said.

Article source: http://feeds.nytimes.com/click.phdo?i=c7ac02e17adc1f9e0c0205355d731722

Heir Apparent at EADS Appears in Internet Video

Some media commentators are calling the video of the 50-year-old heir and chief executive of the Lagardère media-to-missiles empire an embarrassment.

The nearly three-minute video — more Fashion TV than the financial news network CNBC — has received more than half a million hits since it was posted on the YouTube video sharing site Wednesday. It was shot as Mr. Lagardère and Jade Foret, a 20-year-old fashion model, posed recently for photos to accompany a cover story in the weekend magazine of Le Soir, a Belgian newspaper. The footage shows Mr. Lagardère and Ms. Foret kissing and embracing as they discuss how they met and fell in love this year.

While the video is unlikely to ruffle many feathers within Mr. Lagardère’s publishing business, which includes magazine titles like Elle and Paris Match, it has been viewed with consternation in the more buttoned-down world of aerospace and arms making. And it has placed the Frenchman in the spotlight at a sensitive time for the board and crucial shareholders of EADS, formally European Aeronautic Defense and Space, and its Airbus subsidiary, who have come under pressure from management to create a new governance structure.

Louis Gallois, the EADS chief executive, said in June that he and other top group managers were pressing for a new arrangement that would allow any investor to buy or sell shares freely in the company, while still preserving the delicate balance of influence between France and Germany in its governance.

A shareholder pact that dates from the group’s creation in 2000 stipulates that the French and German stakes in EADS must be equal.

Currently, Mr. Lagardère’s company owns a 7.5 percent stake in EADS while the French government holds 15 percent. Meanwhile, Daimler, the German automaker, owns 15 percent and a consortium of German private- and public-sector banks holds 7.5 percent.

But both Daimler and Lagardère have made clear in recent years that they do not view their EADS holdings as core to their operations, and the French and German governments have struggled to broker a sale of the shares to other investors in a way that would preserve the ownership balance.

A management restructuring brokered in 2007 by Nicolas Sarkozy, the French president, and his German counterpart, Angela Merkel, placed Mr. Gallois, a Frenchman, at the helm of EADS and Thomas Enders, a German, in charge of Airbus, the group’s largest business unit, for five years. The chairmanship of the group was awarded to a German under the proviso that Mr. Lagardère — also a close friend of Mr. Sarkozy — would take over that post in mid-2012.

But in recent years, Mr. Lagardère, who holds a seat on the EADS board, has appeared increasingly disinterested in his company’s aerospace assets. They are a legacy of his father, Jean-Luc, the former chief of Matra, a military contractor that was eventually merged in Airbus. According to a number of top managers, Mr. Lagardère’s attendance at EADS board meetings has been sporadic and often perfunctory.

Many in the French and German news media have reacted to the video with scorn. Both the German business daily Handelsblatt and the French newspaper Le Monde described it as “embarrassing” and “disturbing,” while Libération, another French daily, likened the video to a Brazilian soap-opera. Challenges, a French newsweekly, found it “stupefying.”

Mr. Gallois, the EADS chief executive, told The Wall Street Journal as recently as last month that he expected the board would appoint Mr. Lagardère chairman next year. Alexander Reinhardt, an EADS spokesman, would not be drawn into answering what implications, if any, could follow from the video controversy.

“It is not up to EADS to comment on this,” Mr. Reinhardt said.

Ramzi Khiroun, a spokesman for Mr. Lagardère, did not return calls requesting comment.

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