LONDON/TALLINN Nokia's (NOK1V.HE) plunging share price and persistent speculation it might be a takeover target is far from attracting real suitors interested in saving the struggling mobile phone company.
The handset maker's equity value has halved to 17 billion euros ($24.91 billion) since the leak in February of CEO Stephen Elop's memo comparing Nokia to a man standing on a burning oil platform.
But investors are afraid the company is losing market share so fast in both smartphones and low-end devices that it may never recover.
Another turn-off for investors and potential buyers alike may be that Nokia does not look like a cost-cutting opportunity because its main problems lie with technology.
One banker who advises technology companies was skeptical about any company wanting to buy Nokia, putting the likelihood of a bid for the entire company at below 10 percent.
"It would be like jumping into the ocean from 500 feet without a lifejacket," the banker said. "There is nobody driving strategy, most of the senior guys are gone. The company is firefighting."
The shares briefly rose last week on speculation that Microsoft could be interested in buying Nokia, but they fell back once Nokia denied they were in talks.
Talk of an offer from No. 2 phone maker Samsung Electronics (005930.KS) briefly surfaced on Wednesday. But the market appeared to shrug it off and the shares fell 4 percent.
"I don't think it's a viable target for Microsoft, and even less for Samsung. I don't see any value for Samsung in buying Nokia," said Canalys analyst Pete Cunningham.
Last week Nokia warned second quarter sales and profits would miss forecasts and abandoned hope of meeting key targets set just weeks earlier as it flails at mounting competition.
Samsung, by contrast, has built up a successful smartphone offering based mostly on Google's (GOOG.O) Android platform and took No. 1 position in Western Europe, Nokia's home market, in the first quarter, according to IDC.
Samsung is not an acquisitive company and hence an unlikely acquirer of Nokia, said a second banker, adding that Motorola Mobility (MMI.N) had only just turned the corner after its own restructuring and would be loath to take on another struggling company.
Starting from late 2011 Nokia is switching to Microsoft's Windows Phone software from its own Symbian platform as part of an overhaul of its phone business set out by Elop four months ago.
While the partnership may have added to speculation about an acquisition, the second banker said a move for Nokia would not help Microsoft since it wants to move deeper into mobile services rather than handset production.
An acquisition could also complicate Microsoft's relationships with other handset makers, analysts say.
"I don't see many additional benefits for Microsoft from taking full control. They need to attract other companies to their platform," said Canalys' Cunningham.
Analysts and bankers said Nokia's brand, which has shed most of its value over the last three years, would still be of value for smaller phone vendors who are seeking to improve their position such as China's Huawei Technologies HWT.UL.
Huawei has started to aggressively build a consumer brand, marketing its new smartphones and tablet PCs in glitzy Beijing malls and even a Milan fashion show.
A banker said that interest from Huawei "was an outside chance" as Huawei was getting more comfortable with M&A.
TOO MUCH FOR PRIVATE EQUITY
A share price of just above 4 euros values Nokia's main cellphone business at almost zero.
Nokia had net cash of 6.4 billion euros ($9.38 billion) at end-March. It also owns top digital mapping firm Navteq, which it bought for $8.1 billion, and has a 50 percent stake in Nokia Siemens Networks NOKI.UL, also worth a few billions.
However, talk of raising close to $25 billion to support a private equity bid for the whole of Nokia was "dreaming," even taking into account a strong private equity market in the United States and Europe, said a banker who advises financial sponsors.
"Lenders would not be comfortable putting a huge amount of leverage on Nokia, which limits what you could do in the debt market," said the banker.
"You could be looking at funding up to half the price with equity, when the largest private equity firms are typically putting a maximum of about 500 million euros ($731 million) behind a single investment in Europe."
Bankers said that it was more likely that private equity firms would look at bidding for part of Nokia.
Nokia and Siemens are already letting two private equity groups look at the books of Nokia Siemens Networks as they try to sell the joint venture, other people said previously.
(Editing by David Cowell)