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As a BlackBerry (NASDAQ:BBRY) long, I was disappointed when the news came out Monday of the failed Fairfax Financial bid. Additionally, I was disappointed when I read the company was raising $1B in cash using convertible debentures, since I thought the current cash position of $2.3B would be enough to see the company through this tumultuous time. The stock responded to the news by shedding some 17% of its market cap, dropping to new lows.

Before I continue, I should point out how wrong I've been about BlackBerry in the past. Previously on Seeking Alpha I was bullish on the turnaround story, as well as stating just a few weeks ago that I thought the Fairfax deal would go through over on my personal blog. Those were a couple huge swings and misses, and I'm down approximately 50% on the shares I purchased back at the $13.50 mark (Canadian Dollars) back in 2012. So take what I'm about to say with a grain of salt.

Many articles have been written about the possible suitors for a BlackBerry bid. Apple (OTC:APPL) is a popular one, so is Samsung (OTC:SSNLF). Microsoft (NASDAQ:MSFT) gets mentioned a lot too, even though they just shelled out 3.79B Euros ($5.1B) for Nokia's handset business and 1.65B Euros ($2.2B) to license their patents.

Other potential companies have been identified like Qualcomm (NASDAQ:QCOM), (backed by private equity and one of BlackBerry's founders, Mike Lazardis) Google (NASDAQ:GOOG), HP (NYSE:HPQ), Lenovo, Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), and probably a few I've neglected to mention. While some of the speculation is warranted, this author thinks most of these companies want little to do with a struggling handset maker, even with a strong balance sheet and some interesting pieces. (BBM, patents, large cash balance, QNX, etc.)

One thing investors are missing when it comes to any takeover speculation is the Canadian government's history of stepping in and blocking deals when they determine a foreign company is coming in and buying Canadian strategic assets.

Let's look at a few examples.

In 2010, Australian mining giant BHP Billiton (NYSE:BHP) made a $40B hostile takeover offer for Potash Corp. (NYSE:POT) Partially due to heavy political pressure exerted from Saskatchewan's premier, Brad Wall, the deal died at the feet of the feds.

In 2008, American firm Alliant Techsystems (ATK) launched a $1.33B bid for the satellite business of MacDonald Detwiler and Associates. That deal also died at the feet of the federal government.

And just a few weeks ago, Ottawa rejected a $520M deal that would have sold Manitoba Telecom's Allstream mobile phone service to Egyptian investors. No precise reasons were given for killing that deal.

In fact, there are even rumors that the Canadian government nixed a Lenovo bid before it was even made official.

Yes, the Canadian government has approved huge deals from foreign companies before (even one from China's state owned CNOOC for Nexen, an oilsands player) but the trend isn't exactly the friend of a company looking to get bought out by a foreign competitor.

There's a case to be made for buying BlackBerry at these distressed levels. Sentiment is soundly negative, the market is undervaluing some interesting assets, and the upside potential if the company does manage to turn things around is huge.

American investors underestimate the "Canadian pride" angle of BlackBerry. It's still viewed as a crown jewel of Canada, one of our great success stories. The government knows this, a great deal of their members probably share this view. Letting BlackBerry get bought out by a foreign competitor could prove to be a politically disastrous decision. These are the things the Canadian government thinks about.

The takeover story isn't as easy of a slam dunk as most in the media are making it out to be. The Canadian government has a history of rejecting these deals, something that would greatly influence any potential suitors. Rumor has it they've already squashed one suitor. This, combined with the tepid interest reported from potential suitors, is why I think a new bid is unlikely.

Buy BlackBerry if you see a compelling value story. Don't buy it for the takeover play.

Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: One Overlooked Factor In The BlackBerry Saga