BlackBerry founders mull takeover
11 October 2013
BlackBerry co-founders Mike Lazaridis and Douglas Fregin yesterday said they may consider taking over the company, just two weeks after Fairfax Financial Holdings tabled a $4.7 billion bid.
The former executives of the smartphone maker, who hold a combined 8-per cent stake in the company, said in a filing with the US Securities and Exchange Commission that they have hired Goldman Sachs and Centerview Partners as advisers and are considering to bid for the 92 per cent of the company that they do not own.
According to the filing, Lazaridis and Fregin, who started the company in 1984, are ''considering all available options with respect to their holdings of the shares, including, without limitation, a potential acquisition of all the outstanding shares of the issuer that they do not currently own, either by themselves or with other interested investors.''
Blackberry, which recently changed its name from Research In Motion, has seen its shares plunge by around 90 per cent from over $80 per share in mid-2009 to around $8.82 per share, and its market value down to $4.7 billion, from its 2008 peak of a whopping $84 billion.
Till recently, BlackBerry, a pioneer in providing secured emails on handheld devices, had firmly pushed for staying independent, pinning its hopes on a turnaround from sales of its latest smart phones.
But its financial problems came to a head this year after disappointing sales of its new Z10 model smartphone that was released in January - after many delays.
The Ontario-based company has been soliciting buyers since last month, when it revealed a $1 billion loss for the quarter ending 30 June and said that it would cut 4,500 jobs. (See: BlackBerry to post nearly $1 bn Q2 loss, cut 4,500 jobs)
Last month Blackberry reached a preliminary deal to be acquired by a consortium led by its largest shareholder, Fairfax Financial, for $4.7 billion. (See: Blackberry receives $4.7-bn buyout offer from Prem Watsa's Fairfax Financial)
Fairfax, with about 10-per cent stake, had offered $9 a share in cash, a mere 3.2 per cent premium to BlackBerry closing price on 20 September, valuing the company at about $1.9 billion excluding the $2.8 billion in cash reserves.
Under the preliminary deal with BlackBerry, Fairfax has until 4 November to table a definitive bid for the company.
But, Fairfax, whose proposed acquisition is subject to receiving financing commitments from Bank of America Merrill Lynch and BMO Capital Markets, has run into trouble since it may not be able to come up with partners or full funding for the deal.
BlackBerry has agreed to pay Fairfax a fee of 30 cents a share, or $157 million, if it accepts another superior offer. The breakup fee rises to 50 cents a share, or about $262 million, if Blackberry and Fairfax sign a definitive transaction.
Bloomberg yesterday reported that potential suitors like SAP AG, Cisco Systems and Samsung, which were approached last week by BlackBerry advisers, have indicated that they are only interested in parts of the company.