November 16, 2005 12:11 PM PST

Someone new wants a slice of the BlackBerry pie

BlackBerry maker Research in Motion on Wednesday asked investors to dismiss a minitender offer from an investment company that has a reputation for buying blocks of shares at "below market value."

The Waterloo, Ontario-based mobile device maker said it received a copy of an unsolicited bid by Irvine, Calif.-based TRC Capital. The bid asked to purchase up to 1,000,000, or approximately 0.5 percent, of RIM's outstanding common shares.

TRC has asked to buy the shares at $57.91 each ($69.00 Canadian), which is a 2.89 percent discount to the $59.64 ($71.05) closing price for RIM's common shares on the Toronto Stock Exchange on Nov. 1, the day before the offer was made. RIM shares in Wednesday midday Nasdaq trading hovered around $64.86 per share.

"RIM wishes to inform its shareholders that it does not recommend or endorse this unsolicited offer, and that RIM is not associated with TRC Capital, the offer or the offer documentation. TRC Capital's unsolicited offer is not related to RIM's previously announced plan to repurchase, from time to time, up to 9,500,000 of its common shares on the Nasdaq," the company said in a statement.

Representatives from TRC were not immediately available for comment.

The tender offer comes as the federal court prepares to reach a key decision next week in the contentious lawsuit against RIM by patent holding firm NTP. Judge James Spencer is expected to rule as early as Nov. 22 on the validity of a $450 million settlement agreement that the parties signed in March.

NTP, which seeks an injunction against RIM's BlackBerry on the grounds that it violates NTP's patents, argues that the settlement agreement is ambiguous. RIM contends that it is clearly outlined.

A minitender is a widely disseminated offer to purchase a public company's shares at below market price. The buyer then typically sells the shares for a profit.

A minitender bid differs from a takeover bid, proxy solicitors said, because the entity asking to buy the shares wants just a small percentage--usually far less than 20 percent--of the public company's outstanding shares.

"Generally, minitenders offer consideration that is anywhere from 3 percent to 35 percent below the current market price of the shares sought. This discount invites the question of why security holders would tender their securities to a minitender when they could sell them in the market for a greater price," the Ontario Securities Commission said.

In the past six years, TRC has launched a number of minitender offers: Nova Chemicals in 2000, Nortel Networks in 2003, Sun Microsystems in 2004 and even Halliburton.

 

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