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BlackBerry Ltd. (BBRY)

  • Sep. 25, 2013, 9:37 AM
    • With Prem Watsa's Fairfax Financial not putting additional cash into its BlackBerry (BBRY -2.2%) acquisition offer and having failed to provide details about its buyout consortium, skepticism is growing the deal will get the financing it needs.
    • Wedge Partners' Brian Blair: "Watsa is trying to salvage his 10 percent investment in the company and create a backstop while other potential investors hopefully bid it up."
    • Fund manager Marc Gross suggests financing could arrive if it's secured by BlackBerry's patents. Raymond James estimates the company's patents, software licenses, and network could be worth $2.8B.
    • Watsa, for his part, is making the case his deal would avoid the regulatory review that would come if BlackBerry was to be acquired by a foreign firm.
    • Shares are now 7% below Fairfax's offer price, and not far removed from where they traded before the deal announcement.
  • Sep. 23, 2013, 9:58 PM
    • Fairfax Financial will merely roll over its existing 9.9% BlackBerry (BBRY) stake into its $9/share buyout offer, and won't invest any more cash. Prem Watsa tells Bloomberg his firm will rely on other investors to finance the rest of the deal via equity and debt.
    • The news service reports Watsa has held talks with Mike Lazaradis (previous) to get the BlackBerry co-founder and his 5.7% stake to join Fairfax's effort; Watsa said in an interview today Lazaridis isn't yet involved.
    • In addition, sources state P-E firms Blackstone and KKR decided to pass on BlackBerry, and that Fairfax's consortium is "in flux."
    • BBRY -0.7% AH to $8.76.
    • More on BlackBerry
  • Sep. 23, 2013, 1:34 PM
    • BlackBerry (BBRY) has signed a letter of intent to be acquired by a consortium led by Prem Watsa's Fairfax Financial for $9/share in cash, or $4.7B. Fairfax already owns 10% of BlackBerry. (PR)
    • Diligence is expected to be completed, and a formal transaction agreement signed, by Nov. 4. Until then, BlackBerry can evaluate alternative proposals.
    • The deal has a termination fee of $0.30/share to $0.50/share.
    • BlackBerry remains halted. Shares last traded at $8.24.
    • Update: Shares will resume trading at 2PM ET.
  • Sep. 21, 2013, 4:22 PM
    • Sources tell the NYT BlackBerry (BBRY) Mike Lazaridis has "separately approached" P-E firms Blackstone and Carlyle about a possible bid for the company he co-founded. They caution talks are preliminary.
    • The WSJ has also reported of Lazaridis' interest in a bid, but is short on details.
    • Lazaridis was BlackBerry's co-CEO (along with Jim Balsillie) until last year, and still owns a sizable minority stake that could help facilitate a deal. Some of the remarks he made during his tenure (e.g. "There will never be a BlackBerry with an MP3 player or camera.") wound up being infamous.
    • Yesterday's giant FQ2 warning and layoff announcement could allow Lazaridis to obtain a lower price, but it might also make P-E support harder to come by.
  • Sep. 20, 2013, 3:07 PM
    • Bloomberg reported a short while ago BlackBerry (BBRY -2.5%) has hired PwC to "evaluate the company for potential buyers." The company is already believed to have hired other consultants to help evaluate its options.
  • Sep. 18, 2013, 2:30 PM
    • The WSJ  reports BlackBerry (BBRY -0.6%) is "preparing to make deep staff cuts by the end of the year via layoffs that could cost up to 40% of its employees their jobs." The paper adds the job cuts "will cut across all departments and will occur in waves, likely affecting several thousand employees."
    • BlackBerry has already been trimming headcount as it evaluates M&A options and contends with weaker-than-expected BB10 hardware sales. However, there hadn't been any indications to this point of layoffs on the scale suggested by the WSJ.
    • Director/former Sony Ericsson chief Bert Nordberg recently asserted BlackBerry can survive as a "niche company."
    • BlackBerry had 12.7K employees as of March, and over 17K two years ago. FQ2 results arrive on Sep. 27.
    • Separately, BlackBerry has announced a BBM Android app will launch on Saturday, and a BBM iPhone app on Sunday.
    • Earlier: BlackBerry launches Z30 (formerly the A10)
  • Sep. 15, 2013, 3:58 AM
    • Interest in acquiring Blackberry (BBRY) has reportedly been tepid, but the handful of suitors that are looking at the struggling company would be more open to buying parts of the firm than the whole business.
    • A few private-equity funds have signed NDAs so they can start looking at BlackBerry's books. However, a number of the largest P-E firms and some Asian hardware manufacturers are not interested in any deal.
    • Analysts reckon that BlackBerry's services business, which powers its security-focused messaging system, is worth $3-4.5B and its patents $2-3B, while it also has $3.1B in cash and investments. On the flip side, analysts ascribe little-to-no value to the company's mobile phone unit and estimate that it could cost $2B to close. BlackBerry's market cap is $5.4B.
  • Sep. 11, 2013, 1:12 PM
    • BlackBerry (BBRY -2.6%) is set to talk with lawmakers about the Investment Canada Act, which covers the acquisition of local firms by foreign companies. Any acquisition worth more than C$344M ($332M) is automatically reviewed.
    • BlackBerry's actions come amid reports Prem Watsa is having trouble getting Canadian pension funds to join his efforts to take BlackBerry private. The NY Post previously reported BlackBerry would prefer a "Google-like" buyer (almost certainly a foreign company) over a P-E firm.
  • Sep. 9, 2013, 7:56 AM
    • BlackBerry's (BBRY) shares are +4.2% following a report in the U.K.'s Sunday Times that former director Prem Watsa has lined up billions of dollars in backing from Canada Pension Plan Investment Board to take the troubled handset maker private.
    • Other Canadian pension funds are seen supporting Watsa's bid as well.
    • Watsa, whose Fairfax Financial is Blackberry's largest shareholder with a 10% stake, resigned from the company's board in August after it said it was considering selling itself.
  • Sep. 4, 2013, 4:10 PM
    • Sources tell the WSJ  BlackBerry (BBRY +5.9%) is " aiming to run a fast auction process that could be wrapped up by November." The report led shares to spike just before the close.
    • Meanwhile, sources tell Bloomberg Microsoft (MSFT -2.2%) is "keeping an eye" on BlackBerry in the wake of the Nokia deal. Given Microsoft's commitment to Windows Phone, any interest in BlackBerry from the software giant could be related to the company's BES/network operations center assets rather than its hardware ops.
    • The reports come as analysts continue to cut estimates. BlueFin Research says its checks indicate there have been major BB10 production cuts, and that BlackBerry has "amassed significant component and finished goods internal inventories, while many carriers and retailers are not restocking."
  • Aug. 28, 2013, 12:14 PM
    • Rumors Lenovo (LNVGY.PK) will make a $17/share bid for BlackBerry (BBRY +5.3%) are fueling a rally in the latter company's shares.
    • BlackBerry shares have already soared more than once this year on Lenovo speculation (I, II) that didn't pan out. But that was before the company began formally evaluating "strategic alternatives" widely believed to include a sale.
    • The fact Lenovo's market cap only stands at $10B means acquiring BlackBerry in full wouldn't be easy, should the Chinese PC/smartphone giant be interested.
  • Aug. 21, 2013, 10:35 AM
    • BlackBerry (BBRY -2.6%) is giving up some more of its recent gains after Bloomberg and contacted analysts suggest the company's phone business is "essentially worthless," and that BlackBerry's other assets (patents, BES, the network operations centers, cash/investments) are only worth ~$5B (current market cap is $5.3B).
    • Fund manager Brian Huen: "Nobody is interested in buying the entire entity. I think they are now in the phase of saying, ‘We will do anything to maximize value, including breaking up the company.'"
    • Canaccord: "The most logical acquirer of BlackBerry would likely attempt to transition BlackBerry’s subscriber base to its own competing smartphone products" BMO thinks it would cost a buyer $800M to shut down BlackBerry's phone unit.
    • However, much of the buyout speculation thus far hasn't involved a rival OEM, but Prem Watsa and his reported efforts to talk to both P-E firms and "industry players" about a bid.
    • Pac Crest recently suggested BlackBerry's purchase commitments will limit the size of any bid.
  • Aug. 16, 2013, 12:54 PM
    • BlackBerry (BBRY -3.5%) is giving back a portion of its recent gains. Shares still +15% since Reuters' Aug. 9 report about the company's willingness to go private.
    • Pac Crest's James Faucette (previous) argues today BlackBerry's $5.3B in off-balance-sheet purchase obligations (inc. $4.3B in purchase order commitments) will limit the company's buyout premium.
    • On the other hand, many think BlackBerry's patent portfolio could fetch a hefty sum. MDB Capital's Chris Marlett recently estimated the portfolio is worth $2B-$3B.
    • On Wednesday, Nomura argued a bid above $12-$13/share in unlikely.
  • Aug. 16, 2013, 3:00 AM
    • Bloomberg has done some digging in BlackBerry's (BBRY) May proxy filing and found that CEO Thorsten Heins would make $55.6M if the struggling mobile-device company were to be sold and he was to be fired.
    • The figure includes salary, incentive payments and equity awards, and is based on BlackBerry's share price at the end of Q4. If Heins is sacked without a change of ownership, he would get $22M.
    • However, finding a buyer might not be so simple - the company's bankers have been touting it on the quiet for a year and have met with little interest.
  • Aug. 13, 2013, 11:13 AM
    • BlackBerry (BBRY +9%) is now up 27% since Reuters first reported the company is thinking of going private. The company's enterprise value (excludes $3.1B in cash/investments) has grown to $3B.
    • While Prem Watsa reportedly talks to both P-E firms and "industry players" about a deal, the NY Post reports BlackBerry would prefer to be acquired by a "Google-like" buyer rather than a P-E firm. One source speculates Amazon (AMZN - believed to be interested back in 2011, and possibly able to leverage BlackBerry's NOCs to bolster AWS) could be an option.
    • AllThingsD reports Silver Lake "has no interest in working with Watsa or BlackBerry" on a bid.
    • Another upgrade has come in: Scotia Capital has lifted shares to Outperform.
    • More on BlackBerry
  • Aug. 13, 2013, 2:18 AM
    • Alberta Investment Management would think about investing in BlackBerry (BBRY) if the company were to go private.
    • It's early days," AIMCo CEO Leo De Bever said. "No one has approached us with anything that is baked.
    • AIMCo's public interest adds to that of the Canada Pension Plan Investment Board, as well as to a report that Prem Watsa's Fairfax Financial (FRFHF.PK) is is "exploring ways" to take the company private. Watsa resigned from BlackBerry's board after it formed a special committee to explore strategic alternatives, including a sale. Fairfax is BlackBerry's largest shareholder.
    • More on BlackBerry
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Company Description
BlackBerry Ltd is a designer, manufacturer and marketer of wireless solutions for the mobile communications market.