BlackBerry (NASDAQ:BBRY) has drawn interest from distressed-investing firm Cerberus Capital Management, according to multiple reports, a development that could complicate its tentative deal with Fairfax Financial Holdings to go private.
According to reports from the Wall Street Journal and Bloomberg, which both cited unnamed sources close to the matter, Cerberus is looking to get confidential access to BlackBerry's books. The reports noted that the interest from Cerberus might not lead to a deal. The Journal report also said that at least one other distressed-investing firm has been looking BlackBerry, but it's not clear who that is or if they're still interested. Cerberus manages more than $20 billion in assets, according to Bloomberg, and it invested in car maker Chrysler in 2007 and led a group that acquired grocery-store chains from Supervalu earlier this year.
A BlackBerry spokesman declined to comment, according to the Journal. "We do not intend to disclose further developments with the respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives," he said.
Last Friday, BlackBerry reported a $965 million loss for its most recent quarter, which came a week after the firm said it would cut 4,500 employees, or 40 percent of its workforce. A consortium led by Fairfax Financial Holdings, 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. The consortium did not have the financing in place for the deal when it was announced. Further, the deal also has a roughly $150 million breakup fee, which BlackBerry would be on the hook for if it turned down Fairfax's offer and sold itself to another party. Analysts have said they think the Fairfax-led consortium will wind up paying less than $9 per share; BlackBerry's shares were trading at $7.78 this morning.
A Securities and Exchange Commission filing released late Tuesday laid bare that the company is struggling in emerging markets, especially against smartphones running Google's (NASDAQ:GOOG) Android software, where it once found growth and success.
"The intense competition impacting the company's financial and operational results that previously affected demand in the United States market is now being experienced globally, including in international markets where the company has historically experienced rapid growth," BlackBerry said in the filing.
Meanwhile, in other BlackBerry news, both the Globe and Mail and AllThingsD reported that the company is considering selling some of its real estate to raise money. The reports, citing unnamed sources, said BlackBerry has approached commercial real estate companies about how best to value and sell some of its holdings in Waterloo, Ont., where it is headquartered.
"As we work to our target of reducing expenditures by approximately 50 percent over the next three quarters, that includes optimizing our space," BlackBerry said in a statement to AllThingsD. "Should space become unnecessary for BlackBerry's continued use, we will work with key partners in the community who may need some of our surplus space."
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Globe and Mail article
- see this AllThingsD article
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