Nokia (NOK) Lower as Investors Approve Microsoft (MSFT) Deal
According to the WMPoweruser (FT) on Tuesday, about 99.7 percent of Nokia shareholders approved the €5.4 billion deal with Microsoft (Nasdaq: MSFT). An extraordinary general meeting was held today in Helsinki.
Shares of Nokia have more than doubled since the deal was announced in late summer. The Financial Times listed four potential questions by investors.
First, what will happen with the rest of Nokia? Well, Nokia will find itself with a pile of cash (net €7.5 billion or so). This paints the way for potential bolt-on acquisitions for NSN. While some recent speculation has been made to Nokia entering a deal to acquire Alcatel-Lucent (NYSE: ALU), chatter Tuesday has Nokia putting to rest any such rumors.
There's also concern about ebbing revenue in the telecom equipment segment given an influx of lower-cost alternatives out of China.
Next, who will be CEO? While Risto Siilasmaa is filling the CEO role on an interim basis, some speculate that NSN chief Rajeev Suri might be a good fit. Another choice might be CFO Timo Ihamuotila. One key point made is that structure of Nokia will be as important as who is leading the company. Suri is likely to put NSN in focus, while Ihamuotila might opt for more of a holding structure setup.
Investors will want to know what will happen with Nokia's other two divisions. While many are excited over Nokia's advanced technologies unit, which would largely work on R&D for the company, some are less excited about its maps segment. The main reason Nokia's map unit wasn't sold to Microsoft was due to conflict over price, according to some reports.
Finally, what about a shareholder-friendly capital allocation? The FT noted that some expect about €4 billion to be returned to shareholders in the form of special dividends over the next few years. Third Point's Dan Loeb, who recently took a stake in Nokia, will also likely push for a rich buyback or dividend.
Amid the reports, Nokia shares are paring recent gains, down 3 percent Tuesday.