BlackBerry's (NASDAQ:BBRY) board is warming to the idea that the company could be broken up into pieces. The news comes amid growing concern that a consortium led by Fairfax Financial Holdings to take BlackBerry private in a $4.7 billion deal can't line up the financing to do so, according to a Bloomberg report.
The report, citing an unnamed source familiar with the matter, said that suitors approached by BlackBerry advisers--such as Samsung Electronics, Cisco and SAP--are only interested in parts of the firm, such as its secure server network and patent portfolio. Intel doesn't want to bid for all or part of the company but might be interested in looking at BlackBerry's patents, the report said, citing an unnamed source familiar with Intel's thinking.
Cisco, SAP and Intel declined to comment, the report said, and Samsung said it has ruled out a bid for all of BlackBerry. BlackBerry confirmed that its board is working with independent financial and legal advisers to conduct "a robust and thorough review" of its strategic options. "We do not intend to disclose further developments with respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives," the company said in a statement, reiterating its position from earlier in the week.
The consortium led by Fairfax Financial, BlackBerry's largest investor at around 10 percent, has signed a letter of intent to take BlackBerry private in a $9 per share deal that values BlackBerry at $4.7 billion. The companies have until Nov. 4 to conduct due diligence and in the meantime BlackBerry can shop for another buyer. BlackBerry's stock is currently trading at $7.96.
Until now, BlackBerry executives have publicly said they are looking to maintain the company as an end-to-end solutions provider primarily focused on the enterprise and "prosumer" markets, and not break it up.
"If you break up the company, you're going to get more than the company is worth right now," Sachin Shah, a strategist in special situations and merger arbitrage at Albert Fried & Co., told Bloomberg. Whether Fairfax's bid is successful or not, "breaking it up sounds more appetizing for all involved," he said.
Meanwhile, Canada's government this week blocked the sale of Manitoba Telecom Services Allstream fiber optic network to Accelero Capital Holdings, which is controlled by Egyptian telecom tycoon Naguib Sawiris. The action could signal the government's resolve in blocking a sale of all or part of BlackBerry on nationals security grounds, Reuters noted.
In a bit of bright news for BlackBerry, Rogers Communications reversed course and the Canadian operator said it now intends to sell the BlackBerry Z30, the firm's newest flagship touchscreen smartphone. "In response to customers' feedback and excitement about the device, Rogers will be offering the new Z30 to its customers," Rogers said in a statement, according to AllThingsD. "We have a longstanding partnership with BlackBerry and continue to be big supporters of the company and their products."
- see this Bloomberg article
- see this AllThingsD article
- see this WSJ article (sub. req.)
- see this Reuters article
- see this separate AllThingsD article
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