HTC’s falling share price may make the company more attractive to potential buyers, Bloomberg is reporting. As I’m writing this, the Taiwanese handset maker is worth some $4.2 billion and that’s an amount some Chinese companies could easily pay to get HTC’s brand and technology. We’re talking about such mobile rising stars as Huawei, ZTE and Lenovo, all of which lack the brand recognition HTC has.
Pierre Ferragu, a Sanford C Bernstein & Co analyst, agrees with this point of view saying that HTC could be an attractive target for “a company with more scale but less product development expertise and weak branding position.”
However, despite its recent struggles, HTC’s owners don’t want to offload. That could easily change if one of the companies mentioned above makes an offer that is hard to refuse, paying a hefty premium per share.
Chairwoman of HTC Cher Wang and her family still hold a stake in HTC and may not favor a takeover as long as the company still has cash to keep its business going – and one quarter of losses is hardly the end of the world for the vendor.
We do want to see HTC getting back on track but the company’s lack of scale may limit its ability to take back the lost market share. On the other hand, by going to bed with some of the bigger Chinese rivals, it get to benefit from the better access to the vast Chinese market and reach many new users. We’ll see where this goes…