ALAMEDA, Calif.-UTStarcom Inc. said it is exploring “strategic alternatives” and has retained Merrill Lynch & Co. as its financial adviser. The announcement could mean that UTStarcom is openly seeking to sell itself or merge with another company.
“Our board of directors and management team believe that the inherent value of the company and its opportunities are not reflected in our current share price,” said Hong Lu, chairman and chief executive officer of UTStarcom. “We believe the engagement of Merrill Lynch will help us to carefully examine a range of short and long-term alternatives.”
UTStarcom said Ying Wu has been tapped to oversee the effort and as a result will not assume the title of global CEO next year as previously announced.
UTStarcom has suffered a variety of financial stumbles this year, including delays in filing its annual report and a Securities and Exchange Commission investigation into certain aspects of the company’s financial disclosures.
Aside from selling infrastructure and other communications gear, UTStarcom is also one of the world’s top 10 handset makers. That it is struggling in the handset market comes as no surprise; Nokia Corp. and Motorola Inc. are effectively stealing market share from smaller players. Indeed, Tier-Two vendor BenQ Mobile has already filed for insolvency.
