BlackBerry Ltd’s Plan B: Gather Bids from Other Possible Buyers
BlackBerry Ltd seems really determined to sell all or components of itself to potential buyers. The Canadian smartphone maker is now in discussions with Fairfax Financial Holdings, its largest shareholder, for a possible $4.7 billion takeover. The transaction is undergoing due diligence and it may take until November 4 before the bid either succeeds or fails.
However, according to sources, the company has also entered into talks with other possible buyers like Google Inc, SAP, and Cisco Systems. A deal with any of those companies may serve as a fall back in case the transaction with Fairfax does not push through.
BlackBerry has reportedly requested for expressions of interest from other prospective strategic buyers. According to sources, those include Intel Corp, Samsung Electronics, and LG Electronics. It is expected that any or all three firms would mount their interest to buy within this coming week.
Seeking more bids
BlackBerry is also being eyed by a few private equity firms. One of those is Cerberus Capital Management, which has already asked the company for additional financial details. A possible takeover offer may be expected in the coming few weeks.
Right now, market observers could only guess which of the mentioned companies would really post bids for BlackBerry. But most analysts agree that those possible buyers could be most interested about BlackBerry’s patent portfolio and secure server network. It should also be ideal that the company now has lower valuation, making it cheaper to acquire than it was several years ago during its heydays.
Of course, all those prospective bidders would go on with extreme caution. That is because there is uncertainty surrounding the company. Just last month, BlackBerry unsurprisingly posted a quarterly loss of almost $1 billion due to a write-down of unsold Z10 handsets in its inventory.
Time may run out
The clock could be ticking for BlackBerry. Aside from the issue about the continuous decrease in its valuation, another blow is about to hit it. The company’s licensing contracts and patent portfolio are forecast to be cut by half within the coming 18 months. Thus, it would surely lose attractiveness soon.
The company first announced its plan to weigh options in August. Back then, it was aiming for an outright sale. It formed a special committee to look at the best possible strategy to aid its ailing operations. The same committee continues to look at many other strategic alternatives.