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Bloomberg: BlackBerry more open to breakup, suitors only want pieces

  • Bloomberg reports BlackBerry (BBRY) is "more open to a breakup" as doubts continue to swirl Fairfax Financial will be able to obtain the funding needed for its $9/share bid to succeed.
  • The news service adds SAP, Cisco (CSCO), and Samsung (SSNLF.PK, SSNGY.OB) were "approached last week by BlackBerry advisers," and indicated they’re "only interested in parts of the company." That provides a bit of color to Saturday's Reuters report.
  • Intel (INTC) is said to be open to bidding for BlackBerry's patents, but nothing else.
  • BBRY -1.4% AH
  • Earlier: Canadian pension fund still weighing BlackBerry investment
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Comments (30)
  • WATERLOO JOE
    , contributor
    Comments (396) | Send Message
     
    Pension funds appear to only have an interest at this point only if some big player steps up to take over Blackberry
    9 Oct 2013, 07:04 PM Reply Like
  • sfinvestor
    , contributor
    Comments (987) | Send Message
     
    That's a way of saying pension funds are not interested. And more importantly, BBRY taken private is not the solution.

     

    If big players are involved, they have no need for the pension fund.
    9 Oct 2013, 09:39 PM Reply Like
  • Patent News
    , contributor
    Comments (1321) | Send Message
     
    indeed microsoft and google are not interested in the whole company or patents going down in value each day.

     

    the company will be sold off for scraps, not a premium!

     

    http://seekingalpha.co...

     

    http://seekingalpha.co...
    10 Oct 2013, 08:03 AM Reply Like
  • LYogi
    , contributor
    Comments (2251) | Send Message
     
    While it would be sad to see the company disappear, as a shareholder a breakup may be the best outcome as the patent portfolio, the secure messaging system, the cash, the real estate holdings, BBM, etc should be worth much more than the $9/share LOI for the whole company from Fairfax.

     

    For more on this possibility see:
    http://seekingalpha.co...
    9 Oct 2013, 07:42 PM Reply Like
  • Ben Learner
    , contributor
    Comments (211) | Send Message
     
    @LYogi

     

    Making money at all costs with a sale and break up is not what most BlackBerry investors want?

     

    I would not like to see BlackBerry sold piecemeal.

     

    I would like to see how it gets on under new management.
    9 Oct 2013, 09:26 PM Reply Like
  • LYogi
    , contributor
    Comments (2251) | Send Message
     
    I agree Ben. Best case scenario is that BBRY soldiers on and remains public so that investors can eventually participate in the upside.

     

    However the board is under a duty to the shareholders to seek maximum value if the company is to be sold and if that means they can get $2 by breaking the company up into pieces rather than $1 by selling it to one bidder then they have to go with the former.
    9 Oct 2013, 09:33 PM Reply Like
  • Infinity Group
    , contributor
    Comments (578) | Send Message
     
    I'd prefer it stay public and in two years reevaluate my holdings
    9 Oct 2013, 11:24 PM Reply Like
  • adiotaiwo
    , contributor
    Comments (48) | Send Message
     
    True,it would be great to see the company under a new management team,but it seems the present management has given up due to things that are not known to outsiders.The way they have bungled from one move to the other may just prove that.Most recent is the BBM launch.
    10 Oct 2013, 05:26 AM Reply Like
  • AI2
    , contributor
    Comments (151) | Send Message
     
    Anyone bother by the very possible scenario that for not being able to secure financing, Prem Watsa will still walk away with $157 million if Blackberry sells one piece to some other party?
    9 Oct 2013, 07:55 PM Reply Like
  • Randal James
    , contributor
    Comments (2793) | Send Message
     
    A12

     

    I think PM's offer only stands if there is a better bid 'in toto' than his. Carvin' off pieces and parts don't count. The could not, for instance, sell off a parking garage and he happily gets a check for $150M - which is still a lot of money even if it is CDN.
    9 Oct 2013, 08:39 PM Reply Like
  • AI2
    , contributor
    Comments (151) | Send Message
     
    @RJ

     

    Thanks for the reply. What you just said reminds me of my bet with alext1379 where the entire company has to stay intact and declare bankruptcy for a loser to be declared. Please be my judge if/when Blackberry declares for bankruptcy.
    9 Oct 2013, 10:23 PM Reply Like
  • Randal James
    , contributor
    Comments (2793) | Send Message
     
    AI2

     

    I'm having a hard time believing:

     

    IF PW doesn't take it over and no one else shows up, the company reverts to its current humble unproductive strategy, losing only demand for handsets and enterprise sales.

     

    Why in that situation would the company stay intact? All these whispered parties of interest want something, even if it is the infrastructure cogs or esoteric features such as messenger or keyboard technology. I'd be setting up a cash window in the hall and mailing out flyers.

     

    Then I'd have less hard assets and more cash. Sell enough and then there are no liabilities whatsoever. This is a pretty unreliable board, so they might start a chain of root beer stands or tanning parlors but my guess is they try to preserve something of the original BBRY franchise. This effort may succeed or fail - who knows the damage that's been done to the brand?

     

    But an outright bankruptcy is farfetched, as is keeping the business intact. It seems a poorly constructed bet - other than there will be no loser.

     

    I have not even tried to pencil it out because the CDN gov't has to be appeased on paper, but it is possible that this could be a voluntary liquidation. Sell everything for the best price possible, settle all the scores and mail the difference out to shareholders. I think that would save a nice chunk of change on at least one exec's parachute.
    9 Oct 2013, 11:45 PM Reply Like
  • AI2
    , contributor
    Comments (151) | Send Message
     
    RJ I agree...it's rare that a company goes down this way. It's kinda like saying the Titanic is only considered sunk if everyone stays on board and doesn't jump. Hence I was pushing for more realistic terms when the bet was made, but of course, alext1379 tried to construct it in a way in which he can easily back out. If you considered his original statement, "I'll bet Nokia goes under before BlackBerry." how stupid does that sound just 1 week after he made that statement? How stupid does it sound 1 month after the statement?

     

    I'm still not convinced that there will be a buyer for parts before bankruptcy so I can still win the bet, but you're right. The most likely outcome would be no loser and the only reason that is the case is alext1379 won't take his own advice and grow a pair.
    10 Oct 2013, 02:01 AM Reply Like
  • Randal James
    , contributor
    Comments (2793) | Send Message
     
    Well, I'll save these conversations for reference if you need an arbiter over the outcome here. I hope the bet was a good one - licking a flagpole on a January morning in Waterloo...
    10 Oct 2013, 02:15 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8659) | Send Message
     
    Sum of the Parts?

     

    Perhaps ~$8.50 per share + cash.
    9 Oct 2013, 08:00 PM Reply Like
  • Patent News
    , contributor
    Comments (1321) | Send Message
     
    patents are worth much less than your sum of parts equation so lower than 8
    10 Oct 2013, 08:04 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8659) | Send Message
     
    And what value did I assign the patents?
    10 Oct 2013, 08:45 AM Reply Like
  • bob adamson
    , contributor
    Comments (4558) | Send Message
     
    The Canadian Federal Government will have an interest in keeping the core of the enterprise together and largely located in Canada
    9 Oct 2013, 08:01 PM Reply Like
  • tiger8896
    , contributor
    Comments (627) | Send Message
     
    I read that the Canadian gov't just blocked a foreign acquisition of a telecom company, the deal was worth about 500M. They said they would be concerned about a foreign takeover of BBRY because of national security concerns of Canada and the US. You can pretty much rule out any Chinese company taking over BBRY and any others would likely have a hard time taking them over.

     

    A breakup makes little sense if they sell the crown jewels like the network infrastructure and BBM which I assume is what buyers are looking to acquire. Leaving BBRY independent with only the handset business would leave them with a dim future.
    9 Oct 2013, 08:51 PM Reply Like
  • sfinvestor
    , contributor
    Comments (987) | Send Message
     
    "BlackBerry’s advisers have been reaching out to its technology partners to gauge interest, the people said:"

     

    It's kinda subtle, but basically the difference between a street whore (soliciting others) and an escort (being solicited). One accepts $20, one $2K. There will be no bidding war for BBRY assets.

     

    There's only two material assets worth buying from BBRY:

     

    enterprise: 500M-1B to SAP or similar
    Patents 1.5B-2.5B from Intel, etc.

     

    No one wants this thing whole nor does BBRY have anything others "need". At most, BBRY assets are "wants" and when you are a cheap hooker, you get hooker price. (Having to solicit others basically tell you there is nothing BBRY has that anyones needs) Fairfax cannot fund this deal based on all the soft languages coming from BBRY and pension fund (weighing essetially means no thanks).

     

    BBRY doesn't even want all of blackberry, lol.
    9 Oct 2013, 09:26 PM Reply Like
  • LYogi
    , contributor
    Comments (2251) | Send Message
     
    you neglected to mention the secure messaging system valued at 3-5B, the 2.6B in cash and the 1.5B in real estate.

     

    QNX worth anything to the auto industry?

     

    BBM worth anything?

     

    suddenly we are at 10B and being very very conservative along the way...
    9 Oct 2013, 09:35 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    Why not just fire everyone including Prem Watsa and hire competent people then start rebuilding again!
    9 Oct 2013, 09:40 PM Reply Like
  • Randal James
    , contributor
    Comments (2793) | Send Message
     
    They tried that right at the last minute on the Titanic, but the replacement crew was skittish when they heard all the details.
    9 Oct 2013, 11:49 PM Reply Like
  • Infinity Group
    , contributor
    Comments (578) | Send Message
     
    starting to think this will happen....

     

    1) goes into bankruptcy protection
    2) goes private at pennies on the dollar
    3) Prem Watsa increases holding
    4) IPO for BlackBerry in the $50 per share price range

     

    yes a little ridiculous, but given the present situation - seems a little believable

     

    9 Oct 2013, 11:28 PM Reply Like
  • keentolearn
    , contributor
    Comments (129) | Send Message
     
    Seeing the condition of BBRY i remerber a story which my grandpa used to tell, a king who lost his kingdom and looking for shelter.
    10 Oct 2013, 08:08 AM Reply Like
  • june1234
    , contributor
    Comments (2641) | Send Message
     
    How bout $5 and a six-pack(domestic). Have a feeling insiders are making boatloads with all the shenanigans going on with days of our BBRY.
    10 Oct 2013, 08:22 AM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    Seems to me that it really doesn't matter what the company is really worth right now. There is a credibility problem here. Most bidders are aware of all the deceptive stuff the BOD has been doing, so they don't trust them and that's why no serious bidder has emerged. I think Blackberry is really in serious trouble now, because they scared away all potential players by not being honest. I don't know how they are going to reassure bidders that they are now being transparent and honest. That is the problem. I mean just the fact the TH gets >50 million (not including BOD) for selling the company says it all!
    10 Oct 2013, 09:43 AM Reply Like
  • LYogi
    , contributor
    Comments (2251) | Send Message
     
    I beg to differ. The company has come clean with their losses and books. They are tying up outstanding litigation.

     

    Potential bidders will respect this.
    10 Oct 2013, 10:02 AM Reply Like
  • Randal James
    , contributor
    Comments (2793) | Send Message
     
    LYogi

     

    I've seen recent chatter - always centered around companies with billions in cash - that Cisco will be fascinated by BBRY. Cisco is famous for being acquisitive.

     

    Yet Chambers has spoken at length about the importance of being able to meld the corporate cultures together. It is a vision, work ethic, and an attitudinal set of virtues. Not considering the bulk of the remaining employees, who I would suggest are nothing but top shelf, what would YOU perceive of as the value to attach to the current management and BOD?

     

    Does one think "Hey, these guys tried really hard and I believe that if Apple and Samsung hadn't gotten so large so fast this would've been a great product!"

     

    I ask that because BBRY is either the victim of a tremendous run of unfortunate outcomes or of serious mismanagement and oversight. That might even be why bidders have expressed interest in THINGS that BBRY possesses, but not BlackBerry as an operational and dysfunctional unit.

     

    I'm not sure potential bidders respect management at all. If some of the current shareholders still do, it might be a good time to revisit that 5 year chart.
    10 Oct 2013, 11:08 AM Reply Like
  • usajordi
    , contributor
    Comments (207) | Send Message
     
    John Sculley said yesterday that if BBRY can separate the business
    could be a terrific opportunity for the company to be turned around and should became extremely successful.
    That maybe could be 50$ per share in a few years time.
    That would be much better than been acquired by PW, as what he can do with the company others more capable could do more!
    So why not separate the BB10 and make a partnership with Lenovo, LG, Huawei, or another and concentrate the efforts in the security part of the company as BBM, BES10 etc. and the moneys coming in with great profit margins!
    But ultimately has to be done by a new management team and TH has to fly back to Germany without golden parachute.
    10 Oct 2013, 12:31 PM Reply Like
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