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Nokia Stock in Play on Reported Takeover Attempt

By Rich Smith – Apr 16, 2020 at 5:04PM

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Who wants to buy this $19.4 billion company for $17.4 billion?

One-time Finnish tech star Nokia (NOK -0.49%) has been hit hard by the coronavirus pandemic. Nokia stock has bounced back, however, gaining roughly 43% from mid-March to mid-April.

Today, investors learned that some of that rally might have been due to buying in a hostile takeover attempt. Nokia shares shot up more than 13% in early trading Thursday, and closed up 7.4%, following a report from online telecom journal TMT Finance that an unknown bidder was seeking to acquire parts or all of Nokia via a hostile takeover.

Cellphone reports a call from an unknown caller

Someone's ringing up Nokia -- but the company seems inclined to decline. Image source: Getty Images.

According to TMT, Nokia recently hired investment bank Citigroup to design a takeover defense. Bloomberg suggested KKR, Apollo Management, or Blackstone could be behind the attempt.  

The rumored takeover could value Nokia at approximately $17.4 billion, according to TMT.

That, however, is kind of a strange number for investors to be getting excited about. By close of trading Thursday, after all, Nokia had reached a market capitalization of $19.4 billion -- $2 billion above the reported takeout price. But even before Nokia began its rumor-fueled run-up, the stock was valued in excess of $18 billion -- which makes a $17.4 billion buyout bid seem rather cheap.

For its part, Nokia is keeping mum on the whole situation. Queried by Reuters for a comment, Nokia replied enigmatically, "Nokia does not comment on market rumors." 

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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