[dbmalloy]

Great article on why it is a dog and pony show to buy Blackberry with the Canadian Governement watching...

Canada Spies Seen as Biggest Obstacle in BlackBerry Bid - Bloomberg

Canada Spies Seen as Biggest Obstacle in BlackBerry Bid
By Theophilos Argitis Jan 15, 2015 3:47 PM CT 0 Comments Email Print

Canada�s spies may be the biggest obstacle to any sale of BlackBerry Ltd. (BB)

A foreign acquisition of the Canadian smartphone maker would trigger a national security review, largely by a secret committee of senior officials that includes the heads of two spy agencies. The committee would determine whether Canada can trust the buyer with government communication.

�The government has shown interest in national security in telecoms� and information technology, said James Musgrove, co-chair of the competition practice at law firm McMillan LLP in Toronto. �I expect they would show a very high degree of interest in this transaction.�

Questions over whether the federal government would allow a foreign takeover of BlackBerry resurfaced yesterday after Reuters reported Samsung Electronics Co. had proposed a potential acquisition. Both BlackBerry and Samsung denied the report, sending the stock down 20 percent today in Toronto, erasing most of the gains from a day earlier.

The regulatory hurdles for any buyer would be lofty, and largely opaque, competition experts say.

The government amended its foreign-takeover law in 2009 to add national security to the list of issues that can trigger a review. While it has outlined some steps in the process, it hasn�t revealed any details of the security review committee or described how it weighs risks. Among the initial steps of any review would be to gather detail on what patents, technologies and operations of BlackBerry are critical to government operations in Canada and other key security allies.

Those security concerns probably eliminate from contention most state-owned suitors and increases the regulatory complexity of transactions from bidders, like Samsung, that aren�t based in the U.S. or U.K., Canada�s two main security partners. BlackBerry markets itself as a secure communications platform in a world filled with hackers and prying governments. The company�s phones are used by world leaders including Barack Obama, David Cameron and Angela Merkel.

Potential Threats

Before any approval, the government would seek to safeguard government secrecy. The bar is higher for companies based in countries considered potential threats.

Canada cited security concerns in 2013 by rejecting Manitoba Telecom Services Inc.�s (MBT) C$520 million ($477 million) sale of its Allstream unit to an investment firm co-founded by Egyptian billionaire Naguib Sawiris.

Canadian officials discouraged Waterloo, Ontario-based BlackBerry from pursuing a deal with Chinese computer maker Lenovo Group Ltd. last year on the grounds it could compromise security, a person familiar with the matter told Bloomberg at the time. Harper said in an Oct. 18 interview that BlackBerry should be wary of potential takeovers that present security risks.

�The first filter is whether the buyer is state-owned; the second filter is whether the country is a friend or not,� said Walid Hejazi, who studies foreign investment at the University of Toronto.

Nexen Bid

The Canadian Security Intelligence Service warned in 2012 that some foreign state-owned enterprises may represent a threat to national security. Later that year, Canada banned state-owned enterprises from acquiring businesses in the nation�s oil sands outside of �exceptional circumstances,� after approving Beijing-based Cnooc Ltd.�s (883) purchase of Nexen Inc. of Calgary. At the time, the government said it would also �carefully monitor� transactions involving foreign state-owned firms throughout the economy.

There would also be additional hurdles, including a separate review that seeks to determine whether a foreign acquisition has a net economic benefit to Canada. That means the buyers may be required to commit to maintain investment and research spending in Canada and employment levels, especially in this election year when a foreign takeover of one of Canada�s most iconic companies would be a campaign issue.

�I would imagine that there would be significant undertakings required� for any approval of a BlackBerry takeover, McMillan�s Musgrove said.

Potash Blocked

Even U.S. buyers are not immune. In 2008, the government blocked the sale of MacDonald Dettwiler & Associates Ltd.�s space business to Minneapolis-based Alliant Techsystems Inc., marking the first rejection under the Investment Canada Act since the law was created in 1985. Harper also denied Melbourne-based BHP Billiton Ltd.�s (BHP) hostile bid to buy Potash Corp. of Saskatchewan Inc. in 2010.

In BlackBerry�s case, it might come down to whether the Canadian government believes the smartphone maker can operate as a standalone company.

�If they believe BlackBerry will fail without this injection, they will allow it,� University of Toronto�s Hejazi said. �If they think it can succeed, they�ll have more flexibility.�

[Prem WatsApp]

Chen, Prem and the board of directors are staying on course, and that means staying independent...

The company has been stabilized and can thrive as a niche player, or make it big in enterprise and IoT. :-)

�   2015 - already in full swing - berry good ...   �

[fmb8]

Chen, Prem and the board of directors are staying on course, and that means staying independent...

The company has been stabilized and can thrive as a niche player, or make it big in enterprise and IoT. :-)

�   2015 - already in full swing - berry good ...   �

So true! I don't understand the excitement over a possible takeover. To me that means the end of Blackberry as we know it. In my opinion, the ONLY way for BlackBerry to survive is to keep on course and let this current plan play out (whether they sincerely intend to sell it or not). This isn't a company selling widgets! Very sensitive information passages through their servers and a change in ownership could see a mass departure of current users. To me there is no choice but to remain independent and if that fails... warm up the band 'cause that's that!

Posted via CB10

[donnation]

So true! I don't understand the excitement over a possible takeover. To me that means the end of Blackberry as we know it. In my opinion, the ONLY way for BlackBerry to survive is to keep on course and let this current plan play out (whether they sincerely intend to sell it or not). This isn't a company selling widgets! Very sensitive information passages through their servers and a change in ownership could see a mass departure of current users. To me there is no choice but to remain independent and if that fails... warm up the band 'cause that's that!

Posted via CB10

I don't think anyone is excited over a takeover, unless you mean the media's excitement. For them its something to talk about because it would be a big deal if a company like BB was bought out because it would likely be the end of them. I personally think it would be terrible if a company like Samsung took them over as Samsung would most likely strip them for parts and that would be the end of it.