October 7, 2013
BlackBerry may not be acquired by Fairfax Financial Holdings, after all.
According to Reuters, the beleaguered Canadian Smartphone maker is in talks with Cisco Systems, Google and SAP about selling all or parts of the company. It is thought Intel Corp., LG and Samsung may also be interested in the Waterloo, Ont. firm.
A number of sources who are “close to the matter” told Reuters potential bidders are progressing cautiously due to the firm’s financial uncertainty.
If such a deal goes through, it would negate the deal BlackBerry announced two weeks ago that Fairfax, its largest shareholder, is to acquire the company for $4.7 billion. Although a definitive transaction agreement is to be finalized between the firms by Nov. 4, some are skeptical that the necessary financing would be available and analysts have said investors are unlikely to throw their support behind the deal.
BlackBerry has asked for preliminary expressions of interest from potential strategic buyers by early next week but, according to Reuters’ report, it is far from certain any of those that have expressed interest will actually bid.
The reason for the interest from Google, Samsung and other companies is due to BlackBerry’s secure server network and patent portfolio, the sources said.
BlackBerry, in a regulatory filing released last week, admitted it simply is not equipped to compete with the industry’s market leaders: Samsung and Apple.
A weak demand for its products in recent years caused the struggling Canadian Smartphone maker to post a $965-million or $1.84 a share loss in its second quarter. One of the main reasons for the substantial loss, which the company announced two weeks ago, was the $934-million write-down in inventory of the BlackBerry Z10, the touchscreen device launched at the beginning of the year. It was the device that BlackBerry hoped would propel the company into the third-place position in the Smartphone market behind powerhouses Samsung and Apple. Despite receiving good reviews, the company simply was not able to generate enough interest in the Z10 to entice consumers away from their iPhones and Galaxy devices.
Jennifer Cowan is the Managing Editor for SiteProNews.