A number of parties are apparently interested in a piece of BlackBerry crumble
BlackBerry has already signed a preliminary agreement with its largest shareholder Fairfax Holdings, which is currently undertaking due diligence ahead of a potential £2.9 billion takeover.
Fairfax has until 4 November to complete the process, but investors doubt the hedge fund’s ability to raise the required funds and BlackBerry is entitled to seek other buyers until a formal agreement has been reached.
Suitors must declare their interest by next week, and other names linked with a move include Samsung, LG, Cisco and even Microsoft, which recently agreed to purchase Nokia’s handset division for £4.6 billion. Other private equity firms, such as Cerberus Capital Management, are also apparently interested.
If BlackBerry reneges on its deal with Fairfax, it could be liable to pay a £90 million penalty, although it would be off the hook if the Prem Watsa-led firm is unable to stump up the cash.
Analysts still believe the most likely outcome is that BlackBerry will be split up. BlackBerry still has 72 million subscribers, of which 20 million are believed to be enterprise or corporate, making it worth as much as $3.5 billion, while its patent portfolio is valued at between $2-3 billion. BlackBerry is believed to have 5,236 active US patents and another 3,370 active applications, although these are likely to diminish in value over time.
BlackBerry still has cash reserves of close to $3.1 billion, but the company is expected to lose $2 billion in the next two years as it cuts jobs and downsizes its business. However it has already embarked on cost-cutting drives and is even investigating the possibility of selling some of its real estate to make it more attractive to potential buyers.
BlackBerry has had a bumpy year! Try our 2013 BlackBerry quiz!