The idea of breaking itself apart and selling the pieces is becoming more appealing to BlackBerry, according to news reports. At the same time, the company's co-founders may be considering making their own bid to take the company private.
In a story published Thursday by Bloomberg News Service, the Waterloo, Ontario-based company is said to be more open to the idea of a breakup, because of the growing possibility that Fairfax Financial Holdings, which recently made a $4.7 billion offer pending a due diligence period in which it will analyze the financials and look for partners, will be unable to raise the needed funding. Bloomberg cites an unspecified "person with knowledge of the matter."
Two of the largest pension funds in Canada, Alberta Investment Management Corp. and Canada Pension Plan Investment Board, have said they would consider joining in a bid, as has another private equity firm, Cerberus Capital Management. Fairfax is reportedly looking for financing from Bank of America and BMO Capital Markets. Silver Lake Partners, which recently took Dell private, has also been mentioned as having been in talks with BlackBerry about enterprise computing.
Cisco, SAP, Intel
BlackBerry has reportedly approached other major companies about a buyout, including Cisco, SAP, Samsung, Intel, LG and Google, but Bloomberg said the indications are those possible suitors are primarily interested in parts of the company. The most valuable properties appear to be BlackBerry's global server network, mobile device management software, the patent portfolio and the enterprise division.
In particular, SAP, Cisco and Samsung have said they're only interested in one or more parts. SAP, for instance, is reportedly looking at the enterprise division. Intel is apparently primarily interested in the patents. The patent portfolio has been estimated by at least one analyst to be worth about $1.6 billion, and the enterprise network in the range of $550 million to $1.1 billion. BlackBerry is also sitting on about $2.6 billion in cash.
The letter of intent from Fairfax gives BlackBerry until Nov. 4 to consider other proposals than Fairfax's $9 per share offer. But, if BlackBerry were to accept another offer and discontinue negotiations with Fairfax, it would have to pay an additional fee of about $150 million to Fairfax.
Bid by Co-Founders?
Meanwhile, BlackBerry co-founder Mike Lazaridis has bought more shares this year in the company he created, and, according to a securities filing on Thursday, is considering the possibility of buying the entire company.
Lazaridis now owns about 8 percent, up from nearly 5.7 percent at the end of last year, and has contracted with Goldman Sachs and Centerview Partners to review his position, in conjunction with co-founder Douglas Fregin. In 1985, the two men started Research In Motion, until recently the company's name.
In January, BlackBerry launched its delayed but much-awaited BlackBerry 10 platform, as well as several devices using the new OS. But stock prices have fallen nearly 20 percent this year, and its market value is about $4.8 billion, compared with $84 billion at its highest point in 2008.