Psion's Symbian sale to Nokia hits inside resistance

Investment group may move to block the sale at shareholders meeting

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A possible fly in the ointment has cropped up in Psion PLC's planned sale of its stake in operating system (OS) developer Symbian Ltd. to Nokia Corp. The Phoenix Asset Management Ltd. investment group, which owns a 13 percent stake in Psion, has indicated it will move to block the sale at a shareholders meeting next Friday.

Last month, Psion announced its intention to sell Nokia its stake in the wireless OS business Symbian, which would make Nokia the majority shareholder of Symbian, bumping its share to 63.3 percent from 32.2 percent. In return Nokia would pay Psion a fixed sum of £93.5 million ($170.5 million) and a variable payment of £0.84 for each Symbian OS-based device sold during 2004 and 2005.

That deal is subject to shareholder approval, which will be voted on next Friday at a Psion extraordinary general meeting.

Phoenix Asset Management informed Psion that as of Feb. 16, it owns 13.12 percent of the company with 54.8 million shares, making it the largest Psion shareholder.

Representatives from Phoenix Asset Management and Psion could not immediately be reached for comment.

Phoenix Asset Management on Thursday said it is unable to support the proposed sale of Psion’s stake to Nokia because it believes “a less conservative route, with greater risks and uncertainty” would be in the company's best long-term interests. Phoenix Asset Management will urge other shareholders to join the company in voting against the deal, it said.

Psion moved quickly with its own statement Thursday by reasserting its approval of the Symbian sale to Nokia. The Psion board remains convinced that a "growing divergence of interests" between those shareholders who are Symbian customers, such as Nokia, and those who are not, may have a negative effect on Symbian's future overall value, Psion said.

The company also attempted to dismiss the fears of some shareholders that if Psion cashes out on Symbian now, it may be cutting off its nose despite saving its face by missing out on what could be an even more profitable Symbian initial public offering (IPO) at a later date. Psion noted that such an IPO would require the agreement of all Symbian shareholders.