Petition aims to ask hard questions from Nokia’s Board of Directors regarding handset division sale

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While we always anticipated Microsoft would bail Nokia out if the company ran into trouble, Monday’s deal still came as a surprise, particularly as things were looking up for the Lumia brand and Nokia Windows Phone sales in general, and of course the details of the deal also, including that Microsoft will not be getting the Lumia brand, seemed unusual.

A petition has been posted for Nokia shareholders at Change.org with the ultimate aim of forcing the Nokia Board to answer them on the 19th November at their Extraordinary General Meeting where the deal will be discussed.

Questions asked include:

Regarding Alternative Scenarios

  • MSFT is expecting to sell 255 million smart phones per annum by 2018 along with $9 billion profit per annum. If Nokia had achieved similar figures, ceteris paribus, it would have been worth in excess of $150 billion. Why did the board not take this opportunity for Nokia themselves?
  • If Nokia was expected to renegotiate with Microsoft in 2014, why did it not delay the deal? As it currently holds 85% of WP market-share, it would have a very strong negotiating position with Microsoft.
  • Would Nokia have had the ability to pursue Android in 2014? Why was this opportunity not taken? (On page 4 of Microsoft’s strategic rationale document, it states the Nokia-Microsoft agreement would have to be "recommitted" to in 2014).
  • Why wasn’t HERE included in the deal? The synergies with HERE and D&S are greater than with NSN.
  • Why wasn’t a direct minority equity stake by Microsoft considered? Would that not have offered Nokia greater benefits? For example through improving the company’s debt rating and helping to increase its cash balances.
  • 2 weeks ago, Nokia CFO Timo Ihamuotila reiterated that Nokia had a "strong cash position". He has made several similiar statements over many months of press releases and conference calls. Why does Nokia Chairman and now interim CEO Risto Siilasmaa state "Nokia alone does not have the resources" and use that as a rationale to sell D&S?
  • Regarding 6, If the interim CEO’s statement is correct, was the company expecting a deterioration in its cash position over the next 4 months even though these are traditionally the strongest sales months in the calendar? Would this delay not have enabled a better purchase price to be negotiated with Microsoft? Why was it imperative it be sold now?
  • Regarding the Future

    1. Does the board believe that Devices & Services division would have been worth more or less after 4 months?
    2. Newspapers and websites throughout the world are currently writing obituaries on Nokia’s demise. How do you think this will affect demand until the deal closes?
    3. It appears Microsoft is about to retire the "Lumia" name. Even if the deal does not go through, do you not think that such uncertainty in the air around the future of the Lumia range of phone will lead to a significant reduction in demand?
    4. With the ending of Symbian and with the ending of Windows phone 7, Nokia experienced notable reductions in smartphone volume. As Nokia is still the current owner of the Lumia range of phone, what reduction of demand does Nokia expect? Was this factored into the final valuation of the sale?
    5. Nokia’s Device & Services division’s significant traction with Lumia represented a tremendous opportunity for Nokia’s share price to at least triple in value over the next 2 years. Do you think this is now more or less likely to happen?

    It seems some of the questions asked are pretty sensible. Do our readers agree?

    Read the full petition at Change.org here.

    Thanks shyam for the tip.

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