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BlackBerry saved … for now

Is there such thing as a mercy takeover?


 

Lefteris Pitarakis/AP

Is there such thing as a mercy takeover? Fairfax Financial and an unnamed group of investors are proposing to buy BlackBerry for $9 a share, or about US$4.7 billion, in a deal that one analyst has described as a “take-under.” The plan, according to Fairfax CEO Prem Watsa, is to refocus BlackBerry on its corporate roots without the pressure of quarterly earnings targets.  “We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world,” Watsa said in a statement.

Watsa, who holds about 10 per cent of BlackBerry’s stock, stepped down from BlackBerry’s board last month when it was announced the company was redoubling efforts to find a buyer for all or part of its business. It’s unclear whether co-founder and former co-CEO Mike Lazaridis is also involved with the buyout proposal. Previous reports suggested that Lazaridis, who held about six per cent of BlackBerry’s stock as of earlier this year, had been talking to private equity partners about a similar going private transaction.

At the moment, all of the buyout consortium’s members are financial players, according to Watsa. However, he told the Globe the group could welcome a strategic investor into the fold if the opportunity presented itself. The terms of the deal also give BlackBerry the right to shop itself around to other potential buyers for six weeks, although several analysts have expressed doubt that another bidder will emerge.

Shareholders are no doubt relieved that the carnage in RIM’s shares has been halted. They dumped the stock last week after BlackBerry revealed it would take a write-down of nearly $900 million in the second quarter thanks to a growing inventory of unsold phones (shares opened Monday morning at $8.47). BlackBerry also announced plans to cut as many as 4,500 employees, or about 40 per cent of its workforce, in an effort to stay afloat. It’s a long fall from grace for a company that once dominated the global smartphone market, employed more than 20,000 and boasted a share price as high as $150.

For BlackBerry fans, the future continues to be murky. The company’s new BB10 devices, though impressive from a technological standpoint, have failed to excite consumers. And it’s no longer clear that BlackBerry’s once iron-clad grip on the corporate market can be counted on to revive the company’s fortunes. Where once employees begged their bosses to equip them with a status-bestowing BlackBerry, these days most employees, from the mailroom right up to the CEO’s corner office, demand permission to send and receive work emails on their iPhone or Android-powered device, forcing corporate IT managers to fall in line. Turning back the tide will be extraordinarily difficult for BlackBerry, privately held or not.


 

BlackBerry saved … for now

  1. The ‘rescue’ must be disappointing to the media and Harper.

    • I’m sure he’s thrilled he doesn’t have to deal with another foreign takeover.

    • Why rescue? Nothing stopping you from sending YOUR money to RIM to help out.

      But no reason to pick my pocket for corporate welfare, its is in the moral sense stealing from me and my family.

      • We saved the auto industry….we subsidize oil…..in fact we support everything but technology. Something we really need!

        • I love how people trot out the nonsense about subsidizing oil, but never cite any examples of how we do this. Unless you consider accelerated capital depreciation as an outright subsidy, there isn’t much in the way of subsidies for oil. Ethanol, yes, but not oil.

          • You just proved my point. Every single one of those links claims that accelerated capital cost allowances in the oil patch are subsidies. Now I’ll repeat my earlier statement:

            Unless you consider accelerated capital depreciation as an outright subsidy, there isn’t much in the way of subsidies for oil.

            And by the way, accelerated capital cost is also available for investments in that favourite hobby horse of yours, technology. Not only that, the federal government hands out billions in SR&ED (Scientific Research and Experimental Development) credits each year. Since you likely never heard of SR&ED (it’s pronounced ‘sred’ or ‘shred’ by those familiar with it), I’ll let you do your own homework; let me know when you get a handle on it.

            It’s a good thing you’re a global economic development analyst. You’ll never earn a living from your knowledge of the domestic economy. Now spend a little time pealing that egg off your face before coming back here to make a fool of yourself anew.

          • Sigh No, I didn’t prove your point….don’t be daft. The western victim myths have overwhelmed your common sense.

            And eventually you’ll get my title right….probably take years, but…..oh never mind. Once again you prefer being an ass to talking…so I’ll leave you to your sexist braying.

          • I can always tell when you’ve lost another argument. You cry sexism. And in the same breath, you accuse me of playing the victimization card.

            I’m curious though. When you made the incorrect statement that oil companies receive subsidies while technology firms don’t, were you speaking out of a lack of knowledge? Or were you lying?

          • No, I get bored with men trying to win arguments by using sexism. It never works, but it doesn’t stop em tryin’.

            ‘Alberta victims’ often try the tactic. That and deliberately misquoting.

            This is sad….you’re another one I thought had possibilities for intelligent conversation…but nooooo…just silliness.

          • There was no sexism in anything I said. I simply pointed out that the oil subsidies were largely a myth – people confusing accelerated depreciation with a subsidy. I also pointed out that the lack of tech subsidies is also a myth – SR&ED is worth billions a year. If thoroughly destroying a female commenter in an online debate is “sexist”, then that’s a definition with which I am completely unfamiliar. And I must admit, guilty as charged. :)

          • See….there’s the thing. You have no idea what I do for a living [but haven’t ever questioned the credentials of men on here….and apparently no idea what I said, because you’re talking about a different topic.

            So you answer a straw man….and with an attack…’think that puts me in my place’ and have no idea how sexist that is…but you think it’s funny.

            I know that’s how Cons argue….but it should have dawned on all of you by now that it’s not winning you any friends or customers.

            Sigh. Pity. Ciao.

          • You know what? I admit it. I made a smart-ass comment about what I think you do for a living, and it’s not the first time. It’s a cheap shot, every time, and it’s childish, and I apologize. Sincerely.

            I could try to explain that nothing I said is motivated by sexism, but I won’t bother here. Someone I admire very much recently said that “An apology followed by the word ‘but’ is no apology at all.” Words to live by.

          • Apology accepted. Thank you.

  2. Saved or ready to chop up?

  3. Am I the only one who doesn’t think $4.7 billion is a lot?

    My understanding is the Blackberry is debt free and has $3.1 billion cash on hand. Add to that the estimated $2-3 billion value of their patents and it seems to me that $4.7 is about right, and may even be a pretty good deal.

    • It’s a gamble. Small payout for potentially massive gain IF BB can turn it around. Almost like buying an option.

  4. Good since blackberry announced they
    had problems every news hound and other reporter type expects them to die? Why they have a great product not as good or popular as I phone or the Japanese product but an excellent product for business. Note that the I phone and their Japanese friends are easily hacked not so for the blackberry. I had one for many years now, great for business those who don’t work or just hang out at college and drink or snort don’t be so quick to dismiss them since most home users are between 11 and 30 and have never actually worked or had a business and if they do they should really be concerned about the hackability of their product

  5. sorry, one more time a phone with an actual keyboard and security to match any why ? because 11 year olds demand stupidity before sense and lunatics who follow dollars go in the same direction and all assh—les follow their nose right into the fountain

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