Cambridge technology company CSR’s shares rose almost 40% today after Samsung bought its troubled handset technology business for £200 million in cash and spent another £22 million on a 5% stake in the British firm.
CSR said the sale would allow it to focus on faster-growing, more profitable areas such as Bluetooth wireless technology and digital “infotainment” systems inside cars.
Analysts welcomed CSR’s move, with broker Liberum Capital describing the handset division as “structurally challenged” and a “drag” on the parent company.
CSR shares have slumped by more than half since 2007 as it struggled to keep up with nimbler rivals.
Even after today’s rise, the shares have only returned to levels seen a year ago.
However, Samsung was keen to buy CSR’s mobile technology as the South Korean electronics giant works on improving its Galaxy range — the biggest rival to Apple in the smartphone and tablet market.
Samsung has bought a 5% stake in CSR because the two companies “believe that there are significant opportunities for future collaboration in connectivity and location technology”.
Cambridge-based CSR will return most of the £200 million to shareholders. Schroders, which holds a 19% stake, will be the main institutional beneficiary.
The board director with the biggest shareholding is chief marketing officer Kanwar Chadha who holds almost 900,000 shares.
CSR said around 310 staff in the handset division will move to Samsung and should have “strong future prospects”. There was no word of any job cuts. JPMorgan Cazenove is acting for CSR and Evercore Partners for Samsung.
Apple pares down
Apple is planning a much thinner screen for its new iPhone5 as the tech giant responds to its biggest smartphone rival Samsung. The next iPhone will use “in-cell” technology, which makes the touchscreen thinner and improves the quality of images, says the Wall Street Journal. Apple is set to launch its new smartphone by September, with rumours it may happen as soon as next month.
