BlackBerry Sold? Who’s Buying? Will They Go Private?By: Val Powell - September 24, 2013
In mid August, BlackBerry, the Canadian smartphone company, announced that it was up for sale. The past few years have been difficult for the mobile communications company as they have failed to keep up with the competition from companies like Apple and Samsung.
According to The Guardian, a consortium of investors lead by Fairfax Financial have agreed to acquire BlackBerry for just $9 per share (a $4.7 billion valuation of the company). The stock price is a far cry from the glory days of the company, when it once had a high of $148 per share on the Nasdaq. The company also announced on Friday that it intends to lay off 4500 employees due to lackluster sales of its new handheld devices including the Z10, Q10 and the new Z30.
The sale of the company and its employee layoffs, however, does not come as much of a surprise to many analysts, considering that BlackBerry was in the red last quarter. BlackBerry subsequently announced last month that it was considering it’s ‘strategic options’, including, selling the company entirely and possibly going private.
In the opinion of many analysts, going private may give the company the opportunity it desperately needs to restructure. “Going private would allow BlackBerry to restructure behind closed doors where they can focus on building the company and focusing on the enterprise sector,” said Krista Napier, senior analyst, mobility, at IDC Canada.
Fairfax currently owns 10% of BlackBerry and is currently its largest shareholder. It’s been rumored that some Toronto based investors are part of the consortium that submitted an intent to purchase. Exactly who they are has still not been revealed to the public.
The New York Times and the Wall Street Journal reported former co-CEO and founder of BlackBerry, Mike Lazaridis was in discussions with private equity groups, the Blackstone Group and the Carlyle Group about purchasing BlackBerry and taking it private. This move would be a bit of a surprise considering Lazaridis retired from the company as recently as March of this year. None of the speculation was confirmed by Lazaridis.
At the moment there is only a letter of intent for the acquisition of BlackBerry. Several weeks of due diligence remain so there is still time left to deal. How this will all play out remains to be seen.
(Image from Wikimedia Commons)