10-13-13 05:35 AM
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  1. the_sleuth's Avatar
    Welll BlackBerry may be heading for break up:

    BlackBerry Is Said to Warm to Idea of a Breakup
    By Hugo Miller & Jeffrey McCracken - Oct 9, 2013 5:54 PM ET

    BlackBerry (BBRY) Ltd. is more open to a breakup of the company amid concerns that Fairfax Financial Holdings Ltd. may be unable to line up funding or partners for a $4.7 billion buyout, a person with knowledge of the matter said.

    Companies such as SAP AG, Cisco Systems Inc. (CSCO) and Samsung Electronics Co., which were approached last week by BlackBerry advisers, have indicated theyre only interested in parts of the company, people familiar with the discussions said. A breakup would let parties bid for BlackBerrys most valuable pieces, such as its patents or enterprise network, said the people, who asked not to be identified because the talks are private.

    BlackBerry has been soliciting rival bids after agreeing last month to a tentative $4.7 billion offer from Fairfax, its largest shareholder. Under that pact, BlackBerry has until Nov. 4 to consider other proposals while Fairfax and a group of investors conduct due diligence and line up financing. Investors have grown increasingly concerned the current deal will fall apart, with the stock trading below Fairfaxs $9-a-share offer.

    Fairfax Chief Executive Officer Prem Watsa, who stepped down from BlackBerrys board in August in order to put together the bid, hasnt named any of the other members in his buyout consortium. While the group is seeking funding from Bank of America Corp. and BMO Capital Markets, no financing deal has been announced.
    Pension Plans

    Alberta Investment Management Corp. and Canada Pension Plan Investment Board, two of Canadas largest pension funds, have both said they would consider joining a bid for BlackBerry, though neither has committed to the idea.

    Seeking to spark a bidding war for the smartphone maker, BlackBerrys advisers have been reaching out to its technology partners to gauge interest, the people said. SAP (SAP), Cisco and Samsung arent interested in making an offer for the whole company, though they may consider individual parts, they said.

    SAP is evaluating whether parts of the company, including its enterprise business, may be attractive, one of the people said. The enterprise division securely manages fleets of smartphones, including BlackBerrys, for business customers.

    Intel Corp. (INTC) doesnt want to bid for all or part of the company, though it wouldnt rule out evaluating the companys patents, said a person familiar with the chipmakers thinking.

    Jim Dever, a spokesman for Walldorf, Germany-based SAP, declined to comment, as did Ciscos John Earnhardt and Intels Robert Manetta. Chenny Kim, a spokeswoman for Samsung, said her company has ruled out a bid for all of BlackBerry.
    Shares Gain

    Reuters reported last week that a number of technology companies, including Cisco, Google Inc., Intel and SAP, were in talks with Waterloo, Ontario-based BlackBerry about a sale.

    Speculation that a rival bid may emerge has helped drive up the stock more than 5 percent in the past three days. Still, it remains down 32 percent this year and have fallen about 95 percent from its 2008 peak. The shares closed today at $8.11 in New York.

    BlackBerrys latest outreach follows earlier attempts to find buyers. Before announcing in August that it was formally considering takeover bids, the companys bankers spent almost a year canvassing potential acquirers, people with knowledge of the matter said at the time. JPMorgan Chase & Co. (JPM) and RBC Capital Markets quietly contacted would-be bidders and found little interest in the whole company, especially among private-equity firms, the people said.

    Paul Rivett, president of Toronto-based Fairfax, declined to comment on the sale process today.
    Robust and Thorough

    Lisette Kwong, a spokeswoman at BlackBerry, said the companys board is working with independent financial and legal advisors to conduct a robust and thorough review of its strategic options. We do not intend to disclose further developments with respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives, she said.

    Leo de Bever, the CEO of Alberta Investment, said this week that the bidding process has been unusual and that BlackBerry will probably be broken up.

    Its the most bizarre sales process Ive seen in a long time, he said in an interview. Were looking at it, but nobodys come to us with a proposal that makes any sense.

    To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net
    BlackBerry Is Said to Warm to Idea of a Breakup - Bloomberg
    10-09-13 06:39 PM
  2. ppeters914's Avatar
    Lovely....just friggin' lovely. I hope this is just a rumour......heavy sigh......
    10-09-13 06:42 PM
  3. bb4life21's Avatar
    Welll BlackBerry may be heading for break up:



    BlackBerry Is Said to Warm to Idea of a Breakup - Bloomberg
    Warming up??? Lol man blackberry is out to make the most money as possible. They can care less how. That has always been their objective.
    TGR1, richardat and kevinnugent like this.
    10-09-13 06:46 PM
  4. playbookster's Avatar
    Key words "is said to"

    Posted from my Z10
    10-09-13 06:58 PM
  5. anon(5624621)'s Avatar
    "Persons with knowledge of the matter" sounds a little weak...

    But if the shareholders can get more from pieces than the whole, there's not much arguing with that.

    Posted via CB10
    10-09-13 07:04 PM
  6. birdman_38's Avatar
    Unnamed sources...stating what companies may be interested in which parts...it's all nothing but speculation and a lot of unconfirmed information by Bloomberg.
    10-09-13 07:20 PM
  7. ElGusta's Avatar
    With this many players involved sources must be plentiful.
    10-09-13 07:23 PM
  8. JasW's Avatar
    Key words "is said to"

    Posted from my Z10
    You think they'd have any other choice if the Fairfax deal falls through (as looks increasingly likely)?

    Sent from my Nexus 10 using Tapatalk 4
    10-09-13 08:12 PM
  9. h20work's Avatar
    Unnamed sources...stating what companies may be interested in which parts...it's all nothing but speculation and a lot of unconfirmed information by Bloomberg.
    Crappy news if this is how it will unfold.

    "Unnamed sources" and "persons familiar with the matter" have been way to right lately.
    10-09-13 08:26 PM
  10. STV0726's Avatar
    So, if this is true, specifically the section about the various approached companies and their responses, then a full buy-out and privatization by Fairfax is clearly the best option for the survival of BlackBerry...and that's factoring in Prem Watsa's long-term intentions being unknown.

    -STV on Z10STL100-3/10.1.0.4780 TMO US
    10-09-13 08:31 PM
  11. fin2007's Avatar
    Crappy news if this is how it will unfold.

    "Unnamed sources" and "persons familiar with the matter" have been way to right lately.
    and it always turns out to be right. You underestimate Bloogberg too much. Their news is the most accurate in WS.
    Cashgap likes this.
    10-09-13 08:41 PM
  12. h20work's Avatar
    So, if this is true, specifically the section about the various approached companies and their responses, then a full buy-out and privatization by Fairfax is clearly the best option for the survival of BlackBerry...and that's factoring in Prem Watsa's long-term intentions being unknown.

    -STV on Z10STL100-3/10.1.0.4780 TMO US
    Looking like that's the only hope to keep BlackBerry alive in one piece.

    I do find it troubling how many times we heard about Fairfax not securing backers lately.
    10-09-13 08:43 PM
  13. fin2007's Avatar
    Actually the sell in parts may be not a bad idea if you are a shareholder instead of a bb phone fan.

    1. It is clear right now no other guy(except Google/cerberus which we am not sure) would make an bid for the whole co.

    2. I would guess BBRY board/advisor do not like the $9 offer and think it underestimated BBRY value, or another possibility is they are afraid PW would low his offer. (Anyone with a brain can see PW could get finance, at worst he can use BBRY's own cash to get some bridge loan, all he really need is 1B cash from bank, he can just use BBRY's patents/BESServer as a warrant for the loan) .

    So I would think BBRY board&advisor think the $9 offer is too low and try to go other way around:
    1. 2.6B cash
    2. BES/security network/subscribe for 2B or more, lets' the subscribe revenue to be 3B in the next 2 years and net profit for 1B, and BES server for
    1B(4x of revenue), it is not a big risk for SAP to take it at 2B.
    3. patents sell to Samsung/Google for 2B, 2B is really a bargain comparing to Nortel/Motorala/NOK patents value.
    That is already 6.6B.

    Checking the remaining value from BBRY 10Q, except the patents/cache, BBRY book is (12.5-2.6(cash)-3.5Bpatent)(net) - 4B = 2.5B.
    900M are inventory, let's discount it by half 450M, and there is another 2.9B component supply obligation, which would cost another 400~500M to get rid of, and then to layoff most of the employees, let's suppose 50K each, that would cost another 500M, then there are other legal costs, lets's say another 500M, so the remain book value is 2.5B- 4*500= 500M. There is not much left.

    But I believe BBRY could sell BB OS/QNX and design technology and distribution network for several hundred millions to Lenova or other Asian co, and there is 500M tax refund next Summery.
    So overall, I would say the remaining of the company (except cash/patents/subscribe/BES) would still value at least 1B.

    Overall, if they can sell the patents for 2B, subscribe/secure netowrk/BES for 2B, the company can easily fetch 7-8B, likely ~14 per share.
    10-09-13 09:51 PM
  14. louzer's Avatar
    Looking like that's the only hope to keep BlackBerry alive in one piece.

    I do find it troubling how many times we heard about Fairfax not securing backers lately.
    If Fairfax buys BlackBerry, I'm sure that they are more concerned about showcasing the individual parts for resale than they are in resurrecting the business as a whole.

    Posted by twiddling my thumbs on my Qued10 in CB10
    10-09-13 10:00 PM
  15. AnimalPak200's Avatar
    lol,.. the author's last name is seriously McCracken?..

    OK, now onto read the remainder of the article past line 2.

    EDIT: wow apparently there are three McCracken's at bloomberg (last line).

    Anyway, seems like no one wants to be seen as the buyer of the 'ugly BlackBerry lemon'. Can't blame them, especially if it means having to deal with the wrath of any existing users/enterprises when they are told to go buy another solution (think HP and Palm).

    On another note, I've always wondered why so much was paid for the Nortel patents. As proven by BlackBerry's failure to re-break into the market, the mobile market has developed huge barriers of entry (the damn ecosystem). So, if Microsoft, Google and Samsung all agree to buy BlackBerry's patent portfolio for $1 each... essentially the patent portfolio will be commonly owned by the (for all practical purposes) entire mobile industry... making them worthless since there is no significant player to enforce them against.
    Last edited by AnimalPak200; 10-09-13 at 10:25 PM.
    10-09-13 10:01 PM
  16. h20work's Avatar
    and it always turns out to be right. You underestimate Bloogberg too much. Their news is the most accurate in WS.
    I'm not underestimating anything, I was pointing out the rumors we keep hearing wind up being true
    10-09-13 10:04 PM
  17. kevinnugent's Avatar
    Looking like that's the only hope to keep BlackBerry alive in one piece.

    I do find it troubling how many times we heard about Fairfax not securing backers lately.
    It's about 3 weeks to go before the due diligence date is up. Fairfax haven't disclosed any financing, and the Alberta Pension Fund CEO thinks their proposal was "bizarre" which is an extraordinary public statement for a CEO of a major pension fund to make about a respected local financial services guru like Prem Watsa.

    If you were buying a house in that timeframe, you'd have finance sorted. I honestly think the Watsa deal is just to put a floor on the share/sale price. He can't be serious.
    10-09-13 10:12 PM
  18. sentimentGX4's Avatar
    Unnamed sources...stating what companies may be interested in which parts...it's all nothing but speculation and a lot of unconfirmed information by Bloomberg.
    That's how all Bloomberg articles about confidential corporate news start and 99% of the time they are right. If they named the sources, then insider sources wouldn't come to Bloomberg.



    This isn't actually even new news considering that we already have the rumor that BBRY was courting companies like SAP and Google to buy up its parts. Splitting itself up is inherent to this. Also, with BBRY's own sell-by deadline approaching and still only one dubious bid, this makes sense as the next course of action.
    richardat likes this.
    10-09-13 10:29 PM
  19. rebroker2009's Avatar
    The players working out a deal are the ones saying "no comment" inho fairfax can't get financing



    Q10 10.2.0.1725 thanks BL Team
    10-09-13 10:37 PM
  20. fin2007's Avatar
    I'm not underestimating anything, I was pointing out the rumors we keep hearing wind up being true
    So far, all the rumors turn to be 100% right.

    The layoff, the writedown, no bidder, everything ......
    10-09-13 11:38 PM
  21. richardat's Avatar
    If Fairfax buys BlackBerry, I'm sure that they are more concerned about showcasing the individual parts for resale than they are in resurrecting the business as a whole.

    Posted by twiddling my thumbs on my Qued10 in CB10
    +1
    I've said since the beginning not to look to Prem Watsa as a savior....even if the deal went through, he would happily carve up BB the moment he believes it to be in his best interest - and that is quite likely to be the situation within a short time.
    10-10-13 01:31 AM
  22. wout000's Avatar
    One could think that Fairfax didn't have any intention to bring BlackBerry private, but launched the offer to see who would partner up with them and in doing so gauge interest in BlackBerry. The interest is low and Fairfax is now just waiting out the end term of the deal to let Blackberry know it's not interested anymore. Any running lawsuits of investors would stop automatically and this would give Thorsten the perfect excuse to use the non-interest as a reason to start selling BlackBerry in pieces and emerge as the CEO that in hard times got top dollar for the company.

    One could think...
    mathking606 and richardat like this.
    10-10-13 04:01 AM
  23. greggebhardt's Avatar
    Warming up??? Lol man blackberry is out to make the most money as possible. They can care less how. That has always been their objective.
    This is and should be about nothing but money. TH and the BOD could care less about the brand at this point. I can not see anyone buying the whole company as the "business model" did not work. Getting new people or even the previous ones who left Blackberry for another platform, to come back, is a battle that will be hard to win. Blackberry was not able to do this.
    richardat and Saiga like this.
    10-10-13 06:25 AM
  24. JasW's Avatar
    lol,.. the author's last name is seriously McCracken?..

    OK, now onto read the remainder of the article past line 2.

    EDIT: wow apparently there are three McCracken's at bloomberg (last line).
    I hope none of them are named Phil.
    pantlesspenguin likes this.
    10-10-13 08:32 AM
  25. Blackberry_Boss's Avatar
    Last time bloomberg said they were cutting people nobody believed them But look what happen. I believe it. It's all down hill from here guys, I wish it wasn't though. Might go back to Iphone if they come out with a galaxy size phone.

    Posted via CB10
    10-10-13 09:10 AM
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