Nokia Siemens Networks abandons quest for cash; what’s next?

Nokia Siemens Networks today said it had completed its quest for a private equity investment and has decided to keep the company as-is.

In a press release announcing the decision, the move not unexpectedly was cast in positive terms: “We believe that the current shareholders are in the best position to further enhance the value of the company,” said Olli-Pekka Kallasvuo, chairman of Nokia Siemens Networks.

But companies don’t put themselves on the market without a goal of finding the right deal. Despite its efforts, NSN didn’t find any takers – at least on terms it could swallow.

The company said it would continue to pursue its turnaround plans, including a focus on opportunities in mobile broadband, services and customer experience management. It highlighted recent Q1 results, which it said represented its third consecutive quarter of year-over-year growth.

With its search for an outside cash injection ended, the company likely will have to find some additional support from current owners Nokia – already deeply challenged in its core mobile phone market – and Siemens AG.

Whether they are willing to pony up cash to keep NSN intact remains to be seen; the alternative: selling off pieces of the company like rivals such as Motorola have done (perhaps turning NSN from a buyer into a seller of the same assets (CP: Nokia Siemens, Motorola integration begins).

It’s perhaps early for such speculation. But the market already reacted to news of the failed investment quest, pushing down shares of Nokia Siemens Networks to their lowest levels since January 1998.